Loans less in 11 suburbs

MORTGAGE repayments in 11 Gold Coast suburbs are lower than they were six years ago, delivering a surprise buffer to homeowners against the rising cost of living.

With the official cash rate tipped to hit 1.75 per cent by the end of 2022, Proptrack data shows how much homeowners were paying the last time rates were at that level, in July 2016.

Monthly mortgage repayments increased in most Gold Coast suburbs, along with rising property prices.

But today’s average repayments are lower in Runaway Bay, Robina, Ormeau Hills, Varsity Lakes, Coomera, Pimpama, Coombabah, Surfers Paradise, Southport, Biggera Waters and Labrador.

With interest rates at a record low of 0.1 per cent until this month’s rise by 25 basis points, hundreds of dollars had been shaved from average repayments in those areas.

“Over the past two years, low mortgage rates have helped with household budgets and that is part of why the Reserve Bank kept interest rates at record-low levels during the pandemic,” Proptrack economist Angus Moore said.

“We have seen homeowners take advantage of that to pay ahead of their mortgage schedule and build up a significant buffer.”

In Surfers Paradise, average monthly repayments on home loans for houses and units combined were $1660, down from $2030 in 2016.

The suburbs where homeowners saved typically had more modest house price growth, or a higher proportion of units to houses.

Proptrack figures show those still trying to crack the market will be hard hit when the RBA lifts its rate to 1.75 per cent.

In semirural Tallebudgera Valley, current repayments of $5150 would blow out to $6400 – almost double what borrowers there paid in 2016.

Other suburbs where repayments would rise by more than $1000 a month include: Broadbeach Waters, Tallai, Tallebudgera, Bonogin, Bundall, Clear Island Waters, Paradise Point, and Mermaid Waters.

Gold Coast mortgage broker Adam Hall said buyers who bought in the past five years were weighing up whether to lock in a fixed or variable rate.

“About 50 per cent of my clients are first-home buyers and they aren’t shy about moving forward, even in this environment with rising interest rates,” he said.

ABS figures show wages increased just 0.7 per cent in the three months to March. Annual wage growth of 2.4 per cent was well below the rate of inflation, with the Consumer Price Index spiking by a shock 5.1 per cent over the same period.

An analysis of the rising cost of living by comparison website Finder shows fuel prices were up 64.1 per cent since 2016.

“The number of Australians struggling to meet their living costs is continuing to climb, and reached a record high in April, according to Finder’s Consumer Sentiment Tracker,” Finder money expert Rebecca Pike said.

The bills causing most stress in 2022 were rent/mortgage (35 per cent), groceries (30 per cent), and petrol (25 per cent).