Rates make tough times ahead for the market

IF it wasn’t already obvious, Tuesday’s move by the Reserve Bank of Australia board to increase interest rates again signals that the party is over. Higher-than-expected inflation figures over the summer forced the RBA’s hand and quashed any hopes of seeing the cash rate drop back in the first half of the year.

Suffice to say, this wasn’t the news homeowners and borrowers were wanting, particularly after nine consecutive months of increases.

RBA governor Philip Lowe was unambiguous in his monthly statement on Tuesday when he warned there would certainly be further increases.

The hip pocket pain is going to keep biting, with Digital Finance Analytics boss Martin North saying that the high interest rates potentially would remain for years to come.

Real estate experts warn that those who overburdened themselves with mortgages during the record low rates of 2020 and 2021 will bear the immediate pain.

But those who will also be hurt in the long run are young people who are trying to get into the housing market.

Things are already tough enough – both for renters and buyers grappling with chronic vacancy shortages and an undersupply of available units and housing.

Mr North is right when he describes it as a “perfect storm” acting as a pincer on the property sector.

However real estate figures say they are optimistic the Gold Coast will avoid the issues which plagued the city’s market in the years after the global financial crisis.

Let’s hope they are right and that the Coast can ride out the rates pain, emerging from this in a strong position.