Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
More examples of property price falls across southeast Queensland, thanks to research by Cookie, following our recent live show on property trends in Brisbane. This is not a scientific selected sample; they merely represent some of the falls being show on the property portals. The Gold Coast seems particulally prone.
Go to the Walk The World Universe at https://walktheworld.com.au/
The next part of the John Adams quest in which we discuss how people are being ripped off by spurious investment schemes, and how the regulators are consistently asleep at the wheel. This is a problem not just here but in other western economies too. Investors beware!
Go to the Walk The World Universe at https://walktheworld.com.au/
A broad sell-off sent U.S. stocks reeling on Tuesday after a hotter-than-expected inflation report dashed hopes that the Federal Reserve could relent and scale back its policy tightening in the coming months.
This is the last inflation report before the Fed’s policy meeting next week. Investors had hoped the Fed would have some reason to raise rates less dramatically. But the Fed is determined to quash inflation despite the risk of pushing the economy into a recession. And Tuesday’s report dampens hopes that inflation has already peaked.
Financial markets have fully priced in an interest rate hike of at least 75 basis points at the conclusion of the FOMC’s policy meeting next week, with a 33% probability of a super-sized, full-percentage-point increase to the Fed funds target rate. The central bank’s target range is currently 2.25 per cent to 2.50 per cent.
In a note following the August CPI data, Goldman Sachs sees a more aggressive Federal Reserve. “We have raised our forecast for the Fed’s December meeting to a 50bp rate hike (vs. 25bp previously). We now expect a 75bp hike in September followed by 50bp hikes in November and December, which would take the funds rate to 4-4.25 per cent by the end of the year.”
With hopes of a “Fed pivot” firmly dashed, all three major U.S. stock indexes veered sharply lower, snapping four-day winning streaks and notching their biggest one-day percentage drops since June 2020 during the throes of the COVID-19 pandemic. The VIX rose more than 14% to 27.27.
Go to the Walk The World Universe at https://walktheworld.com.au/
An important discussion about the games banks are playing in relation to the setting of deposit interest rates, in the context of the RBA rate hikes. Steve Mickenbecker from Canstar and I explore the elements which are driving returns lower than they should be, and what we can do about it. Another case of the apathy tax at work! Steve Mickenbecker is in Canstar’s Group Executive Team, bringing more than 30 years of experience in the Australian financial services industry. As a financial commentator for Canstar, Steve enjoys sharing his expertise across topics such as home loans, superannuation, insurance, mortgages, banking, credit cards, investment, budgeting, money management and more. Go to the Walk The World Universe at https://walktheworld.com.au/
Join me for a live discussion about the current state of the Brisbane property market with Meighan Wells the Principal of Property Pursuit and co-founder of the Home Buyer Academy and co-presenter of Your First Home Buyer Guide Podcast. In recognition of her expertise and high standards in the fast-growing buyer’s agency industry, Meighan was engaged to develop and deliver the education module for the REIQ course Acting as a Buyer’s Agent and is the former Chairman of the REIQ Buyers’ Agent Chapter.
You can ask a question live. We will look at recent price falls, as well as the latest from our modelling, including information at a post code level. Thanks to Cookie for his work on price falls!!
Go to the Walk The World Universe at https://walktheworld.com.au/
The REINZ has released their report for August 2022 today, and it’s a story of continued weakness across the housing market in New Zealand, which is unsurprising given the significant cash rate hikes imposed by the Reserve Bank there.
So today we will look at the data, and also highlight how the story is still being spun by the industry to try and turn a profoundly negative story positive. Well good luck with that, as the OCR is lifted higher still.
They report that across New Zealand, median prices for residential property (excluding sections) decreased 5.9% annually, from $850,000 in August 2021 to $800,000 in August 2022. Month-on-month, this represents a 1.2% decrease from $810,000 in July. The seasonally adjusted figures show a 2.1% decrease in the median price as we moved from July to August, suggesting weaker performance than expected.
The median residential property price for New Zealand excluding Auckland remained unchanged compared to last year at $700,000. There was a month-on-month decrease of 2.8% from $720,000. A better way to report that, is all gains from the past year have now been extinguished on average.
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The latest from our property insider, Edwin Almeida, as we look at the latest coverage of property, numbers, and trends.
https://www.ribbonproperty.com.au/
Go to the Walk The World Universe at https://walktheworld.com.au/
Queensland has been a state where property investors have traditionally made better returns on a net and gross basis, from investment property in the state, compared with those in New South Wales and Victoria.
To recap, gross investment returns is the ratio of current property market value compared with the current rental paid, assuming the property is fully let. The Net Investment return is a more real-world measure, which takes account of actual vacancy rates, cost of mortgage, maintenance, and management of the property. In our surveys, many property investors have no feel for their true net returns, clinging to the prospect of eternal capital gains.
Those in Victoria are worst placed, which explains the very strong interstate investment in Queensland, one reason why prices and rents had shot up in the past couple of years. But there is something afoot in Queensland, which could change this picture, possibly significantly.
Indeed, those following the AFR will have noted its fever pitch campaign against an Australian-first move whereby landholders will have to voluntarily disclose their interstate holdings in other states before being taxed for their Queensland holdings. These land tax changes were first announced in the 2021-22 budget update on 16 December 2021. Queensland Treasury has said the tax change will raise only $20 million a year from 2023-24 and impact about 10,000 landholders, most of whom who live interstate.
Investors are irate with the changes, saying they will drive investors out of Queensland as well as push up rents and that they felt like they were being taxed twice in two different states.
A spokesman for Mr Dick acknowledged this week the tax change would affect some Queensland investors.
So now Queensland owners are now working out how they will be stung by the tax.
Go to the Walk The World Universe at https://walktheworld.com.au/
In this show we do a deeper dive into the ABS Census data series and examine the distribution and location of vacant property as defined by the census. We highlight the post codes with the highest counts and their distribution. We have mapped the results and added them to our Core Market Model.
Go to the Walk The World Universe at https://walktheworld.com.au/
In this week’s market review we explore the fragile upswing in the second half of the week, which can best be understood as a positioning by speculators, betting on a falling market, typically seen as part of a bear market rally sequence, then anything substantive. I believe the markets are still not fully factoring the evaporation of a FED pivot at least for now, despite the intense and heightened rhetoric.
Indeed, as I discussed yesterday, the current bout of inflation has predominately been caused by over stimulation thanks to ultra-low-rate settings, quantitative easing and loose fiscal measures (i.e., Government stimulus). The truth is this is now coming undone. Thus, I do not regard the slight end of week upswing as a significant turn.
As normal, we will start in the US, such a globally dominate market, then cover Europe, Asia and end in Australia. Go to the Walk The World Universe at https://walktheworld.com.au/