Coffee price prediction just the latest indication that cost of living has reached a tipping point

Gold Coast residents are stuck in a grind, with the cost of everything exploding, from housing to beer and now coffee. How might it end?

Gold Coast, we have a problem.

In most suburbs, you now need an income of around $250,000 just to be able to get a mortgage.

School fees for this year have shot up by up to 13 per cent.

Parking fees too.

Reports this week suggest the cost of beer and wine will also soon escalate, because the price of glass bottles has gone through the roof.

David Ridden, owner of Granddad Jack’s distillery in Miami, said rising glass costs were badly hurting many businesses.

“We’re under a heap of pressure with the cost of glass and the cost of shipping,” he said.

And then there’s the real thin end of the wedge. The prediction that a takeaway coffee could cost as much as $12 by the end of the year.

“There’s a widely held view in Australia that coffee is currently being sold for up to 50 per cent below what it should be,” Essential Coffee NZ and Australia CEO Todd Hiscock informed this masthead.

“Severe drought and then heavy rains in the biggest coffee-bean producing areas in the world have catapulted the price of coffee beans to their highest level on record.

“It’s simple economics – supply and demand.

“I predict that in the next 12 months the price of a cup of your favourite brew will rise to around $10 to $12 a cup and the skyrocketing cost of beans will likely force 30 per cent of Queensland’s cafes to close.”

The price of a cup of coffee is expected to skyrocket – just like everything else. Image generated by Gemini AI

Given the average size of a cappuccino is about 350ml, that would make coffee about 12 times more valuable than petrol.

The price of coffee, of course, is but one small but significant symptom of a much wider problem.

Beer and wine bottles are shooting up in price because electricity costs have escalated, making domestic production expensive, and others are imported. Also imported are coffee beans.

The cost is rising so fast in part because the Aussie dollar has slumped against its US counterpart, plummeting to a five-year low against the greenback last week.

That also means, of course, that anyone hoping to escape ludicrous price rises at home with a foreign jaunt is going to find themselves bang out of luck.

Which brings us back to the original problem we mentioned.

Analysis by Finder.com.au of ABS, mortgage and PropTrack data suggests a gross income of $242,037.93 would be needed to get a mortgage for the average Helensvale house, $261,360.29 for a house in Robina and $314,242.53 in Burleigh Waters.

A couple, both on teachers’ salaries, have little chance in this market, never mind someone on one income.

No wonder we have working people on the Gold Coast sleeping in cars and tents.

When the Reserve Bank of Australia finally meets again next month – yes, they skip January – there will be hopes they cut interest rates to help make those mortgages just that little bit more affordable.

But if they do so, they may weaken the dollar further, helping to push up prices more.

Some economists warn that could mean the RBA delaying interest rate cuts.

“If it keeps falling from here, say 20 per cent since the start of 2024 it could have an impact on the RBA’s decision,” AMP chief economist Shane Oliver said.

Something needs to give though.

A so-called ‘influencer’ caused a kerfuffle last week by suggesting in an online comment that the country was “in a shambles” because someone might attempt to spark up polite conversation at a shopping centre bench.

That was a bizarre suggestion.

But the shambles is real enough alright. It’s revealed in the teachers, nurses and police officers unable to afford their own home.

And the brewing prospect we could soon be paying up to $12 for a simple cup of Joe.

Follow @keithjwoods

Originally published as Coffee price prediction just the latest indication that cost of living has reached a tipping point