Interest rates: What cash rate freeze means for Coast property sector
A prominent developer has revealed what they and other builders are doing to avoid the slowing market as high interest rates continue to bite. FULL STORY
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Interest rates have remained on hold for a third straight month, with falling inflation bringing relief for borrowers.
The board of the Reserve Bank of Australia (RBA) on Tuesday held the cash rate at 4.1 basis points, leaving interest rates on hold for just the fourth time since May 2022.
They last rose in June. following 10 consecutive rises between mid-2022 and early 2023.
The latest pause, which came on the back of a surprise fall in inflation figures, has been welcomed, but Reserve Bank Governor Philip Lowe, presiding over his final meeting in the role said the freeze was to “provide further time to assess the impact of the increase in interest rates to date and the economic outlook”.
“The Australian economy is experiencing a period of below-trend growth and this is expected to continue for a while. High inflation is weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment,” he said.
“The recent data are consistent with inflation returning to the 2–3 per cent target range over the forecast horizon and with output and employment continuing to grow. Inflation is coming down, the labour market remains strong and the economy is operating at a high level of capacity utilisation, although growth has slowed.
“There are also uncertainties regarding the lags in the effect of monetary policy and how firms’ pricing decisions and wages respond to the slower growth in the economy at a time when the labour market remains tight.
It is welcome news for more than 30,000 Gold Coasters who are currently experiencing mortgage stress, a jump of more than 10,000 people than May 2022 and developers who have faced troubled water.
The Gold Coast’s construction sector has slowed dramatically as interest rates rose, struggling against high material costs and supply shortages.
These challenges have seen the demise of several developers and construction companies, including Condev and GCB Construction.
Other developers are now moving to shore up their project by becoming their own in-house builders.
Andrews Projects this week launched its own building win – A Construct to build its $270m Cascade development at Robina.
The company said it expected more developers to follow suite in the lead-up to the 2032 Olympics.
Andrews Projects sales manager Sarah Andrews described it as a “natural step”.
“A Construct will allow us to take control of our projects and deliver them in a more cost-effective and time-efficient manner for our future residents,” she said.
“We have a vast knowledge of the construction industry and the processes and systems required to deliver multi-residential projects, alongside a highly skilled team who will assist with the delivery of Cascade and our future projects.”
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