Category: Household Survey

Property Buyers’ Plans Destroyed By “Higher For Longer” Rate Trends!

The combination of high prices and interest rates is seeing affordability become extremely stretched at a time when cost-of-living pressures more generally are also constraining incomes, according to a recent Westpac Survey.

In response, would-be buyers are pushing the timing of their planned purchases back – less than 10% expect to transact in the next 6mths, the lowest share across all survey waves.

The prospective flow of first home buyers is showing the biggest response to these pressures, planned purchases down materially on last year. Just 2% of those surveyed expecting to become a first time owner in the next year.

Outside of the first home buyer space the story looks to relate more to the interest rate situation. Prospective investor buyers have pared back plans for the next six months.

And sales results for this weekend confirms the slowing market, despite some properties still exceeding reserves in some places. As reported in the AFR, the prospect of interest rates staying high has spooked many buyers, making them less likely to spend above their budgets.

http://www.martinnorth.com/

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Today’s post is brought to you by Ribbon Property Consultants.

DFA Live HD Replay Q&A: A Deep Dive On Post Codes Feeling The Pinch

This is an edited version of a live discussion, as we look at the post code detail from our recent surveys, as the third part in our latest series.

See the basis of our analysis here: So Who Is Really Feeling The Pinch? https://youtu.be/xvE-jPsGQUk

See the mapping of our data here: Mapping The Pinch: Where Households Are Hurting The Most… https://youtu.be/Y-xycboQ1j4

Go to the Walk The World Universe at https://walktheworld.com.au/

https://digitalfinanceanalytics.com/blog/dfa-one-to-one/ for our One to One Service.

Mapping The Pinch: Where Households Are Hurting The Most…

In the second part of our series on March 2024 results from our surveys, we deploy our mapping tools to display the hot spots across the country for mortgage, rental and investor stress, as well as defaults and net rental yields.

For a description of our approach, watch our earlier show here: So Who Is Really Feeling The Pinch? https://youtu.be/xvE-jPsGQUk

On Tuesday at 8pm Sydney we will deep dive on the post code level analysis. DFA Live Q&A: A Deep Dive On Post Codes Feeling The Pinch https://youtube.com/live/GmSKvYYQI1k

http://www.martinnorth.com/

https://digitalfinanceanalytics.com/blog/dfa-one-to-one/ for our One to One Service.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

So Who Is Really Feeling The Pinch?

In today’s show we look at the latest from our surveys – how many households are really under financial pressure – because there are big differences between the “official” figures and those shown in other surveys, and data points, including the rise in calls to financial help lines and hardship supports.

This is the first in a series of shows, culminating with a live show on Tuesday 9th April 2024.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Mapping Mortgage Stress

A deep dive on mortgage stress, using our mapping tools, as we look across Australia to identify the areas with the highest stress counts – defined in cash flow terms.

This is ahead of my upcoming live stream on Tuesday 12th March, where we will look at specific post code level data. Mark your diaries…

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Pop Goes My Budget!

Our latest surveys to the end of February reveals the current state of Household Finances in Australian as measured by cash flow. A record 73.3% of those living in the rental sector are under pressure, while just over half of those with a mortgage are also in net negative cash flow. All up around 48% of households or 4.7 million families are struggling. The causes are clear to see, with costs of living still outstripping real incomes, high mortgage interest rates thanks to RBA monetary policy and rental cost driven sky high. Massive net migration, and bad government housing policies have created this disaster, which will likely be with us for decades. Housing affordability is shot.

So, in today’s show I will walk through the latest findings, ahead of a live show during which we will examine the data at a post code level. That show will be on Tuesday 12th March 2024.

But here we examine how we measure cash flow stress, examine the latest results across mortgage, rental, investor and overall financial stress, and also look at our price scenarios for the months ahead, alongside our estimates of mortgage defaults in the next 12 months.

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The Rental Market Is Broken…

In my latest surveys we showed that cash flow stress among households has risen to an all time high of 73.47% or more than 2.27 million households.

Mapping the Market data from CoreLogic shows the high proportion of areas where house rents have risen by 20% or more across Sydney, and Melbourne, those here, some areas especially to the east of the city did not follow suite. House rents in Brisbane showed more diversity, though central Brisbane saw consider considerable hikes. Adelaide and Perth also had many hot spot areas across house rentals, with some areas to the east of both CBD’s reporting slower growth rates over the past year.

That said, Canberra and Hobart bucked the trend with little or no growth – of course there are rents controls in the ACT which helps to moderate rents.

All this means that for many renters the ability to house themselves has become even more expensive, and this of course flows through into the inflation data with all rents – not just new rents running close to 10% annualised. It’s a real mess, and leading to real social consequences.

Then again, there are some winners as according to data from SQM Research residential landlords in some inner-city and middle ring suburbs pocketed up to $56,000 extra rental income in the past 12 months as rents hit record highs across the major capital cities.

A critical factor here is that some landlords, sitting on strong capital gains, are looking to crystalize their paper profits so have listed their rental property for sale, a trend we see most strongly in Melbourne, but it is spreading elsewhere. In addition, higher rents are not enough to cover the increased mortgage costs, even after negative gearing, so the supply on rental property is on the decline at a time when migration continues to run hot.

The Rental Market Is Broken but do those in political circles want to tackle this critical issue? Lip-service apart, I suspect not. So to that extent, Australia in broken too.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

DFA Live Q&A HD Replay: Latest Household Financial Stress And Modelling

This is an edited version of our live discussion about the current state of play of mortgage, rental and financial household stress across Australia, based on our latest surveys and modelling. We had our post code engine online.

Find out more beforehand by watching this show: Many Households Are In Trouble – Mate! https://youtu.be/np4H9RkPqEo

Original live version with chat here: https://youtube.com/live/Qs__lYQMhP4

Go to the Walk The World Universe at https://walktheworld.com.au/

Many Households Are In Trouble – Mate!

We walk through the latest from our surveys and modelling ahead of our live show which will be on 13th February 2024 at 8pm Sydney where we will look at specific post codes in more detail.

Household financial stress continues to bite, and is spreading into many different types of communities.

Ahead, we do not expect cash flow to improve for many, as mortgage rates will not be falling very soon, the costs of living continue to rise and income growth in real terms is muted, at best.

If you want data on a specific post code, put it in the comments and I will either cover it Tuesday week, or via a separate show.

If you want to get the full data set, this is available via Patreon: https://www.patreon.com/DigitalFinanceAnalytics

Our One to One Service is also available: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Falling Trend Hours Worked May Signal Interest Rate Peak!

Economists got a surprise today as employment fell 65,100 in the month, compared with an average expected rise of 15,000, as hours worked and participation both fell. That said, the prospect of the RBA delivering one final rise in February appears over. Only a big surprise in the December quarter inflation numbers, which will be released on January 31, could force economists to revise their near universal forecast for rates to remain on hold next month. And the monthly inflation data doesn’t point to a shock.

The ABS Labour Force statistics for December was based on surveys run from Sunday 26 November to Saturday 9 December, and collected over the period from Sunday 3 December to Wednesday 20 December. They also rotate the sample, with the new incoming group showing a higher unemployment rate than the outgoing group.

The results from the survey showed that in seasonally adjusted terms with employment dropping by 65,000 people, along with a small fall in the number of unemployed people (1,000), the unemployment rate remained steady at 3.9 per cent in December.

Actually, the falling participation rate stopped the Unemployment rate from climbing as hiring eases, though perhaps most concerning is the trend in hours worked, which has been falling for the better part of a year. How much of this is summer holiday related is an open question, but it seems more structural to me. We also need to note the loss of 106,000 full time jobs, compared to 41,000 part time roles, especially among part-time women. And remember given the current migration settings we need more that 30,000 additional jobs just to stand still.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/