Issue 21 | Thursday 19 October 2023 | Inflation Surprises and Record Migration – What Lies Ahead?
Hello, this is Andrew Bell, and we’re entering the final quarter of the year. In just four or five weeks, the first Christmas trees will start to appear. It’s always remarkable how quickly this part of the year passes.
Now, let’s dive into the latest inflation figures, which reveal a lot. After several months of declining inflation, many of us began to believe we had reached the peak of the interest rate cycle, and we even hoped for rate cuts as early as the end of this year or at the beginning of 2024. However, these figures have shattered that hope.
The latest data indicates that inflation is more persistent than anticipated. While some components of the inflation index, like fruit and vegetables, have been consistently dropping, other key factors such as fuel prices remain stubbornly high.
Unsurprisingly, economists and market forecasters are now predicting at least one more interest rate hike before Christmas. Even more concerning is the consensus that these higher interest rates will linger longer than we initially thought, possibly not declining until late 2024. Ouch! That’s not what we were counting on. To be prudent, it’s best to budget for higher interest rates persisting for at least another year.
It’s no wonder that the popularity of fixed interest rates has all but disappeared. The percentage of new loans with a fixed interest rate component has hit record lows. According to the latest data from April this year, only 15.6% of loans had a fixed interest rate component, compared to 59.2% in August 2021. If you’re borrowing money right now, it’s advisable to opt for a variable rate, as it will likely prove to be more advantageous over a three-year period.
For those who follow my updates regularly, you’re familiar with my frustration that accurate research takes time to surface. We all crave the latest figures, but the fact-gathering process doesn’t operate on our timetable. This was evident in the recent KPMG report, which revealed that 34,000 people had relocated from New South Wales to the Gold Coast between 2016 and 2021. We’ve missed nearly two years’ worth of statistics during these years of significant migration. Considering that Victoria was the primary source of migration from 2020 to 2023, we can anticipate well over 100,000 people moving within just a few years when the full report emerges.
The report sheds light on the motives behind this migration, with the primary reason being the attractive lifestyle, as many working individuals can now live on the Gold Coast while keeping their jobs in other states. As a 46-year-old from Sydney succinctly put it, “It’s much more laid-back here, and everything, from hospitals to shopping centers and restaurants, is within a 10-minute reach.” So, don’t expect any relief from our housing shortage as we accommodate this ongoing influx of people to the Gold Coast.
Did you catch the recent report stating that the Gold Coast is the most cost-effective place to find happiness? Despite the pressure of living costs, the array of entertainment options available here makes it more affordable to go out and enjoy our entertainment facilities compared to other places. It’s just another reason why the Gold Coast remains an appealing destination.
I’m eagerly looking forward to the GC500 next weekend, yet another fantastic event that now calls the Gold Coast home after our recent Gold Coast Pacific Airshow. This city is indeed a fun place to live in.
There’s always so much news to share with you, and when we look at conflicts around the world, it becomes evident that there’s no better place to be than the Gold Coast.
I’ll be back to update you in two weeks.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group