Analysing the Federal Budget's Impact on the Property Market
21st May 2024
With last week's Federal Budget dominating property news, our initial plan was to provide an overview of its implications as the lead article. However, as you will see from our coverage of newspaper, online, and video content below, the commentary offers mixed opinions on what the budget means for the property market.
Given this diversity of views, we decided to let you and your clients read through the relevant articles to form your own conclusions about the budget's impact on property prices. Instead, our lead article this week comes from yesterday's Gold Coast Bulletin.
The article titled "Cheaper to Buy Than Rent" examines the suburbs across the Gold Coast where renting a property is more affordable than buying one. It highlights the current imbalance in the marketplace, revealing that in five out of every six suburbs across Queensland, it is cheaper to rent than to buy.
This situation arises at a time when rental prices have skyrocketed, drastically impacting many Australian families' finances and quality of life.
Here is the full article from the Gold Coast Bulletin:
CHEAPER TO RENT THAN BUY
Shock new figures show home ownership is even further out of reach for many Queenslanders, with five out of six suburbs being cheaper to rent in than buy, despite record rental price rises.
Latest analysis from Compare The Market found an overwhelming surge in suburbs where rent has escalated – costing as much as $6000 a month in the worst-hit suburb, Broadbeach Waters. Despite that, more than 500 suburbs were cheaper to rent in than buy a home – thanks to record home prices pushing mortgage repayments to as much as double the monthly rent.
In 185 suburbs across Queensland, both houses and units were considered cheaper to rent than buy due to high mortgage costs – though there were some bright spots for unit buyers in 15 Greater Brisbane suburbs. Compare the Market property expert Andrew Winter said, “Rising interest rates and soaring property prices mean that most buyers entering the market today will spend more on their mortgage repayments than on their monthly rent.”
Mr. Winter added, “If you’re lucky, you might be able to find a property where the distance between rental payments and mortgage repayments is close. Comparing lenders and choosing a competitive home loan rate can make a big difference in mortgage affordability, especially now that the RBA isn’t expected to move on the cash rate for some time.”
Online moving specialists Muval have a real-time migration model called MuveRank, produced with geographers at the University of Queensland. It is now seeing some reversal in Covid-19 trends. Muval CEO James Morrell said Sunshine Coast, Cairns, and Wide Bay were all in the national top 10 on MuveRank, seeing a rise in people moving in and out.
With households under increased financial pressure, Muval is finding many people are being forced to re-evaluate and move into areas that are either more affordable or closer to family and friends for support and shared costs.
University of Queensland geographer Dr. Elin Charles-Edwards said Queensland was entering a new phase in its population patterns. “MuveRank shows that our cities are returning to normal after years of pandemic volatility, as well as some signals suggesting a peri-urban population shift to regional centres near a city such as the Tweed, Central Coast, and Sunshine Coast. Historically, we tend to see a decline in internal migration during economic downturns, and what we might be seeing is a new phase of trapped populations who are mortgage prisoners or who are being forced out of unaffordable metropolitan areas but still need to be close enough for work commitments.”