Issue 21 | Thursday 20 October 2022 | Interest Rates Linked to Increase in Sales Activity
Hi Andrew Bell and coming to you today from a very busy Gold Coast where there is a lot on as usually occurs in our spring months. A lot of people are still surprised by my recent market insights that there has been quite a significant pickup in buyer activity and sales as we enter the spring season.
It’s clear that interest rates are having a significant bearing on this, and I will explain that in just a moment. For now, let’s have a good look through this whole floor sub-penthouse in this boutique building Sonata. It’s a large four-bedroom sub-penthouse with study, and I will give you some more information about it at the end of this report but have a good look through as these types of apartments are hard to find and are in strong demand (see more information by watching the video update above).
No question that rising interest rates have played a major part in taking the heat out of the real estate market during the course of 2022. People have been shocked at how frequent and how much the interest rate rises have been. One of the quickest upswings in interest rates in history. Of course, this has been driven by the outbreak of inflation, but from my experience, it’s also because the Reserve Bank left it too late to put some more modest increases in interest rates late last year.
So, for many, the sudden and sharp rise in interest rates spooked them. A big question was, where to from here? It caused many buyers to simply park their buying interest and to sit on the sidelines, however many buyers are starting to read the tea leaves with some signs that the three primary drivers of the sharp increase in inflation are starting to be brought under control, and by the very fact that the Reserve Bank had a lower increase in their latest upward move in interest rates. After several months of over half percent rises, it was only a quarter percent.
Anyone who looks closely at the money markets is also seeing that the market is reading that interest rates will peak somewhere within the next 6 months, based on all the information that we have at hand. No question that there is going to be some pain for current borrowers who borrowed to their maximum 12 months ago and did not factor in interest rate rises. Anyone borrowing today, they can borrow less, but with some comfort in knowing that we must be getting close to the top of the current interest rate cycle and that perhaps a year or eighteen months from now interest rates will start coming down.
Many buyers have been simply assessing the lay of the land, and with increasing confidence that they can read what is happening with interest rates they are now back out believing that this is a good time to buy before lower interest rates bring more buyers back into the market. Most people know there is an underlying supply problem, and that will continue to have an underlining strengthening of the market over time, and certainly until there is some meaningful increase in the supply of properties to buy.
The key thing to watch in terms of the future directions of the real estate market is the inflation figure and how quickly it responds to higher interest rates. Meanwhile, the market continues to hold firmly, which was evidenced by two most recent auctions, one being at 48 Rudd Street, Broadbeach Waters with 8 registered bidders and strong bidding, which saw a new record area price at $4.5 million, another home last Saturday 14 Karabella Court, Mermaid Waters with a further 7 registered bidders, seeing in a new area record at $2.01 million, and an expression of interest sale closing last week in Monaco Street, realising a premium price of $9 million.
Congratulations to our team who held a spectacular community day last Sunday with our 4th annual Top Dogel competition. It brought the broader community together when Tedder Avenue was closed down in Main Beach for a morning of showcasing so many of our Gold Coast pet dogs, most of whom are pampered better than us humans. It was a fabulous day raising money for Pet Barn Foundation, where a total of $5000 was donated to them.
As I said, this is a very special apartment in the highly sought-after Broadbeach area. Apartment 29 on level 12 of Sonata Broadbeach is north-facing opposite the parkland, overlooking the ocean and the beach, and it’s a residential-only building, and this sub-penthouse has three car spaces and two storage cages. A rare but invaluable plus in luxury apartment living. As you step outside the building, everything is minutes walking distance, whether it’s the beach, restaurants and all the essential shopping. Of course, within proximity to the Casino, Convention centre and so many community activities that are centred around Broadbeach. Contact Robert Graham, one of our Prestige marketing gents who is handling the sale of this stunning sub-penthouse.
Don’t forget we are now accepting bookings to be part of The Event 2023, Australia’s longest-running, highest-profile marketing event that is renowned throughout Australia as the premier showcase auction of amazing Gold Coast properties. It’s time to showcase your property if you are thinking of selling. Details on screen for The Event 2023. Limited numbers, so get in early.
I will be with you in a fortnight’s time, and we are into November and only 6 weeks until Christmas. When we look around as to what’s happening in the world let’s remember how lucky we are to be here in Australia, and for those of us on the Gold Coast, one of the best places in the world.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group
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