What global inflation means for homeowners

It seems like the cost of goods is increasing and global inflation is impacting nearly everything. We know that you feel it when you go to the grocery store or fill up your vehicle with gas. In fact, SBS News reported that "wholesale energy prices were up 141% in the first quarter of 2022 compared with last year."

As homeowners, the effects could seem even more intense. From repairs and general maintenance to other necessary products, some people are feeling the pressure. But what does global inflation really mean for homeowners? Let's take a brief look at the reality of the situation and what the future may look like.

Rising inflation

It's true that inflation has been rising steadily over the past few months globally, and the impacts are hitting Australia in full force. According to a report by the Bureau of Labor Statistics, "the annual (global) inflation rate in May was 8.6%, its highest level since 1981, as measured by the consumer price index."

Other inflation metrics also have shown significant increases over the past year or so, though not quite to the same extent as the CPI.

As a whole, Australia followed this trend in 2022. The Guardian reported prices in the country "rose 6.1% in the June quarter, the fastest annual pace since 2001 as consumers forked out more for everything from fuel to food." So if you are feeling pressure, you are not alone.

Impact on homeowners

There are many different factors that impact the housing market, interest rates and the cost of owning a home. These include things like global political events, conflicts and health crises. These same components are items that also cause inflation. The global economy is more tied to local prices than ever, so worldwide events will impact the cost of products and services in your own backyard.

The national government has had to employ certain strategies to combat the rising inflation rate in Australia. There are some possible strategies like increasing interest rates, which could mean less initial spending required.

If you are someone who already owns property or a home, consider yourself lucky. This is a great asset to use as protection against the perils of inflation, especially if you have a reliable mortgage. Your home could end up valued at far more than you initially paid for it, known as an appreciating asset.

Keep an eye out for the rising costs of maintenance, however, which could be rising in tandem with inflation. In addition, your property taxes could go up and, if you have a variable-rate mortgage payment, there could be a potential Increase.

If you are ready to protect yourself and your family against inflation, consider buying real estate. Reach out to Ray White Surfers Paradise today.