Interest rates: Worst Gold Coast suburbs to have a mortgage in
More than 30,000 Gold Coast homes are now experiencing severe mortgage stress across some of our richest and poorest suburbs. They’ve been warned there’s more pain on the way.
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Interest rates have again increased as new data reveals 10,000 more Gold Coasters are struggling to pay their mortgage than 16 months ago.
The board of the Reserve Bank (RBA) on Tuesday raised the cash rate by 25 basis points, taking interest rates to 4.1 per cent.
The move, the second consecutive increase, comes just two months after the cash rate was frozen in April – ending a run of 10 consecutive rises by the RBA.
The latest, rates rise, on the back of strong inflation figures, is tipped to bring greater pain to households facing severe mortgage stress.
Reserve Bank Governor Philip Lowe said inflation had passed its peak but remained too high.
“This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable time frame,” he said.
“The Board is still seeking to keep the economy on an even keel as inflation returns to the 2–3 per cent target range, but the path to achieving a soft landing remains a narrow one.
“A significant source of uncertainty continues to be the outlook for household consumption. “The combination of higher interest rates and cost-of-living pressures is leading to a substantial slowing in household spending.
“Housing prices are rising again and some households have substantial savings buffers, although others are experiencing a painful squeeze on their finances. “
Dr Lowe warned further monetary tightening “may be required”.
The rates increase means repayments on a typical $500,000 mortgage will increased by $84 next month.
Mortgage holders are paying $1217 more each month than they were in May 2022 when the RBA began increasing the cash rate in a bid to clamp down on rampant inflation, initiating a tough year for households which have also been hit by significant cost of living issues.
New figures compiled by Melbourne-based firm Digital Finance Analytics (DFA) reveals the number of Gold Coast households facing mortgage stress had increased to nearly 31,000, up more than 10,000 from February 2022 to May.
It comes as monthly mortgage repayments are expected to skyrocket from July for thousands of homeowners who took out mortgages at fixed rates in the past two years while the cash rate sat at record lows, with the fixed period coming to an end.
The postcodes with the highest proportion of struggling homeowners are 4216 and 4209, home to the expensive waterfront mega mansions of Sovereign Islands, Paradise Point and Runaway Bay, the rapidly growing suburbs of Coomera, Pimpama, Upper Coomera respectively.
DFA boss Martin North said there was more pain to come.
“We are seeing an ongoing rise in financial pressure n households, as costs of living, mortgage rates and rents all rise faster than wages,” he said.
“While many younger families are being directly impacted, we are seeing these pressures spread to other households too, into mainstream families, and older ones too. T
“The truth is, we are not at the end of the upward cycle, and more rate rises are to be expected, plus, rentals continue to rise, as investors seek to recover higher costs.
“We will be watching the Gold Coast in the months ahead, as it is one epicentre in the financial stress storm.”
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