Insights: Housing Crisis, Interest Rates & Spectacular ‘The Lakehouse’

Issue 12 | Thursday 15 June 2023 | Insights: Housing Crisis, Interest Rates & Spectacular ‘The Lakehouse’

Greetings, this is Andrew Bell reporting from one of the most iconic properties on the Gold Coast, located at 150 Sir Bruce Small Boulevard, Benowa Waters. Before I dive into this fortnight’s market update, take a moment to appreciate the sheer magnificence of this home. Later in my report, I will provide you with more details about it.

In my previous market update, I highlighted the significance of the Gold Coast as the chosen location for the National Roundtable Summit on the current housing crisis. This summit brought together Real Estate Institute presidents from across Australia, with myself representing Queensland. We engaged in comprehensive discussions, joined by Australia’s leading economist, Nerida Conisbee, and Gold Coast’s Mayor, Tom Tate. The Gold Coast was identified as a prime example of the issues contributing to our ongoing housing crisis.

The discussions surrounding the housing and rental crisis were fruitful, laying the groundwork for further engagement with experts in various fields. These experts will aid us in formulating recommendations to present to the government, opposition, and minor parties. The goal is to implement clear strategies in the short, medium, and long term to address this ever-growing issue. Unfortunately, no government has yet taken direct action to bring about meaningful change. I will keep you updated as progress unfolds.

However, the current focus of attention revolves around the recent increase in interest rates. We find ourselves in a unique situation where economic activity has not responded as expected to the rapid rise in interest rates, as it has done over the past century. This increase predominantly affects those who can least afford it and are not significant contributors to inflation. We are referring to average-income families, parents, and individuals who have purchased a home or even a single rental property. These individuals often live paycheck to paycheck, struggling to meet mortgage payments and cover their weekly cost of living. They are not indulging in luxury purchases or extravagant trips overseas.

It is crucial to note that the majority of inflation is caused by factors external to this group of individuals. Rising interest rates have a limited impact on these external factors. Hence, we need to adopt a new approach. The higher interest rates will ultimately have a significantly negative effect on the economy, potentially pushing it toward a recession, increasing unemployment rates, and forcing many individuals to sell their properties or face mortgagee repossession. Paradoxically, this will have a measurable effect on reducing inflation. The number of people under mortgage stress has already doubled across Australia in a short period. The true impact of higher interest rates will become more apparent as we progress through 2023 and into 2024.

Economists unanimously agree that interest rates should not be further increased and should not remain at their current high levels for an extended period. However, this can only happen if the government implements additional measures to address the primary drivers of inflation. Therefore, the government needs to act swiftly because the Reserve Bank has indicated the likelihood of more interest rate hikes, which will persist for longer than initially anticipated. Presently, the real estate market is maintaining stable prices due to a balance between property supply and the number of people seeking accommodation. However, it is important to note that buyers’ borrowing capacity has decreased by 30% to comply with the lending criteria established after the Royal Commission in 2018.

Undoubtedly, we face a challenging road ahead.

I am thrilled to announce that this year’s RWSP Muscular Dystrophy Ball theme is ‘French’, featuring a spectacular Moulin Rouge-inspired performance. The ball promises to be the Gold Coast’s most enjoyable and fun social events of the year. We recently released tickets, and our Platinum and Gold tables are already sold out, with limited availability remaining for Silver tables. Details on how to book can be found here. Join us with your family, friends, colleagues, clients, or business associates for a memorable night while supporting the battle against Muscular Dystrophy—a debilitating disease that tragically affects young children, leading to premature death. Conquering Muscular Dystrophy will pave the way for advancements in treating many other genetic diseases.

Now, let’s revisit the breathtaking viewing of 150 Sir Bruce Small Boulevard, “The Lakehouse.” This property was the proud recipient of the 2021 HIA Gold Coast Northern Rivers Custom Built Home Award and was also a finalist in the Kitchen of the Year Award. Additionally, it won accolades for New Residential Buildings, Kitchen Design, and Bathroom categories. It truly is a remarkable residence with five bedrooms, four bathrooms, two powder rooms, situated on an expansive 1161 square meters of land, boasting a generous 24-meter water frontage. The home offers an array of features, including a cinema, cocktail bar, guest swings, a magnesium swimming pool, a fully irrigated garden, C-Bus home automation lighting and fans, a three-zone audio system, and motorized recessed blinds, among many others. For more information and to arrange an inspection, please contact Robbie Graham, one of the most talented and experienced agents on the Gold Coast. 

I will be back in a fortnight with some captivating statistics about the real estate market as we approach the midpoint of the year.

Until then, take care!

Warm Regards,

Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group

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