Ben Galea was the first home buyer. But rising interest rates did not worry him. This is the reason

A 25-year-old man purchased a two-story house with a beautiful garden for over $300,000 referring to the early 1990s.

Key points:

• Parts of Queensland saw property prices rise in July, contrary to national trends
• The Regional Australia Institute says housing affordability will keep much of Queensland more insulated from falling property prices than the city
• The Gold Coast and Sunshine Coast markets are the exception, registering accelerated declines in recent months

But in outback Queensland towns like Longreach, it’s the norm.

The Reserve Bank of Australia yesterday raised interest rates for the fourth month in a row, but Longreach resident Ben Galea said he was not stressed.

“When it came time for my fixed rate to change … I didn’t have to change my lifestyle,” Galea said.

“It’s a great city. It’s bustling. There’s a lot of young people here. There’s a lot to do, a lot of sports. It’s brilliant.

“There are things we don’t have here. It takes money to fly back to shore. You don’t see family very often. These are things you let go of.”

As interest rates rise, home values ​​in Australia are falling at their fastest pace since the global financial crisis, with the latest data showing that the median value of the country’s property has fallen 2 percent since early May, to $747,182.

Mr Galea bought his home last year for $310,000 at a “beautiful” flat rate of 1.9 percent.(provided)

But parts of Queensland are expected to be more insulated from falling prices than the city, and some areas have continued to experience rising property prices in the past month.

Regional Australia Institute chief executive Liz Ritchie said it was largely due to the affordability of housing in the area.

“What we’re not going to see is markets in the Australian region and the Queensland region going down sharply,” he said.

“In recent years, the region has seen significant price growth … but these have not been years of only steady incremental growth.

“The shock we saw with the rate hikes will not be felt the same way, especially in rural and remote communities in Queensland.”

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Regional shoppers ‘less worried’

Toowoomba-based Chief Operating Officer Heritage Bank Dan Dredge said the recent rate hikes had not affected the number of people applying for regional Queensland home loans through his bank.

Mr Galea said he loved the lifestyle and community in west Queensland.(ABC Qld West: Victoria Pengilley)

“We don’t see people worrying too much about a rate hike,” Dredge said.

“What we’re seeing is people budgeting and setting their expectations on higher interest rates moving forward.”

Data from CoreLogic found occupancy values ​​in the Queensland region fell 0.8 percent in July, compared with larger declines of 2.2 percent in Sydney and 1.5 percent in Melbourne.

This is the first monthly decline for the Queensland region since August 2020 and follows a record annual increase, with regional home prices increasing 19 per cent over the past year.

But the data is not as simple as it seems.

CoreLogic’s head of research Eliza Owen said the decline in regional Queensland in July was the result of a large price drop of more than 1 percent in the Gold Coast and Sunshine Coast markets, where average house prices were higher than in Brisbane.

“The Gold Coast and Sunshine Coast have seen more rapid declines in recent months as interest in having more of a dampening effect on this relatively expensive market,” Owen said.

“Queensland’s smaller, more affordable market may have shown moderate gains during July, but even here, the monthly growth rate has slowed broadly since the start of the year.”

In July, property prices fell 1.1 percent on the Gold Coast and 1.4 percent on the Sunshine Coast, according to CoreLogic. (ABC News: Dominic Cansdale)

House prices rise in ‘affordable’ areas

Defying the capital city trend, home values ​​continued to rise in July at a slower pace in Wide Bay (up 0.6 percent), Toowoomba (up 0.7 percent), Darling Downs – Maranoa (up 1.8 percent), and Cairns (up 0.1 percent).

“It is anticipated that this market could also see a decline in value in the coming months towards higher interest rate settings,” Ms Owen said.

Mr Dredge expects continued demand for new home purchases in regional Queensland.(provided)

But Dredge said strong growth in the region would continue to drive demand for housing and home loans.

“You keep seeing hiring or job signs in windows on Main Street and Toowoomba. I don’t see that going away anytime soon,” he said.

“I think that will lead to continued demand for new home purchases and home loans.

Read more about the Australian property market:

“Historically, as long as people have good jobs and good savings buffers, they can service their home loans.”

The Regional Australia Institute also estimates the continued movement of people from the capital to the region.

Ritchie urged the government to focus on increasing the supply of housing and infrastructure to ensure a smooth transition for the Australian region.

“We continue to believe that urban to regional migration will continue to flow at the same rate, even higher,” he said.

“If you look at how our country has changed because of COVID, the ability to move, the flexibility … to live where you like and have that opportunity.

“You have a trend that’s not going to stop anytime soon.”

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