Broken debate revived, young buyers told to “skip the coffee”

The relentless surge in house prices has reignited the broken debate over avos, with an executive telling young Australians to forgo an everyday article.

Soaring coffee prices have reignited the broken debate over avos, with a financial data group warning that a morning cup of tea may be the one thing aspiring homebuyers have to give up if they are to put up a roof above their heads.

A host of factors, including inclement weather in Brazil and shipping nightmares, nearly doubled wholesale coffee prices last year.

And data from the United States Department of Agriculture last month suggests the beloved bean is set to become even more expensive, with global production set to drop this year as consumption rises.

In 2016, renowned Australian demographer and columnist Bernard Salt wrote that “the woes of trendy cafes” were among the reasons young people struggled to buy their first homes, saying he had “seen young people order mashed avocado with crumbled feta on five-grain toasted bread at $ 22 a pop and up ”.

But it was the following year that real estate mogul Tim Gurner made international headlines for making a similar point.

Now, Grafa’s chief executive, Heidi Cuthbert, has waded through those same waters.

“With the price of coffee having almost doubled in a year, this will put pressure on the finances of city coffee drinkers who are saving for an expensive item, like a house or a car,” she said on Friday.

“The price of your next cup of tea at the local coffee shop or the beans you buy at the supermarket are probably going to hit your hip pocket. “

She said the group most likely to be affected by the price hike were young people living in urban areas who already face the twin challenges of high urban rents and rising house prices.

“Forgoing the morning beer can be a necessary sacrifice to save for a deposit,” Ms. Cuthbert said.

“Every coffee you drink pushes your dream home further and further.”

His comments come as new data from the Australian Bureau of Statistics shows the value of new loan commitments for homeowner homes rose 7.6% in November, with the average mortgage for homeowner homes hitting a low. record high of $ 596,000.

“Activity in the investor market has also been strong,” said Katherine Keenan, head of finance and wealth at ABS.

“The value of new investor loan commitments rose 3.8% to a new all-time high of $ 10.1 billion. “

The number of new loan commitments to first-time home buyers rose 1.9% – breaking a decline since January 2021 – but was 17.4% lower than a year ago.

CBA Economics Senior Economist Kristina Clifton said the rise was surprising given that some of the major lenders had increased fixed lending rates in recent months.

That factor, combined with affordability constraints and slow population growth, would create “a much weaker housing market in 2022,” Clifton said, with house prices set to decline next year.

Adelaide Timbrell, senior economist at ANZ Research, agreed that the surge in loan growth was “unsustainable” growth.

“We don’t expect to see a repeat of the very strong loan growth we experienced in the early stages of the pandemic,” Ms. Timbrell said.

“We expect rising interest rates to trigger a significant drop in lending over time.

“Fixed mortgage rates are already on the rise and could rise further if the RBA abandons its quantitative easing program, which we are still waiting for despite the disruption to Omicron’s economic activity.”

CoreLogic’s research director Tim Lawless said Thursday that Australia’s two largest markets, Sydney and Melbourne, could peak later this year.

“It is clear that most markets have experienced record growth rates,” Lawless said.

“What I mean by that is when the markets hit their biggest monthly growth rate.

“We saw most capitals go through a peak of growth around March of last year.

“Normally, housing growth trends will gradually slow down before entering a corrective phase, which we are seeing now.”

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