An important week for a Rant as Edwin and I pick apart the latest housing policy announcements, and the broader economic questions surrounding the Trump Tariff games. What will property do as a result?
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Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
You can tell an election is close as both major parties have launched their campaigns formally, with Dutton in Western Sydney and Albo in Perth. Recognising that costs of living and housing specifically are haunting younger voters, who now comprise the bulk of voters for the first time, housing was at the heart of both campaigns. Both parties launched proposals aimed at tackling the housing market, which of course has become more unaffordable for many, as a result of a generation of bad policy.
But I give them both a major fail as both sides presented a fig leaf that their policies will increase the supply of homes.
Yet again, politicians are dealing with the symptoms of high house prices, not the root causes.
And also remember one third of households are renting, and three quarters are in rental stress, how does any of this help them? Cut migration, cut red tape and step back from further financialisaton of the property market, by reducing tax breaks. Its not that hard, but politically, seeing home prices fall is not a winner either, which is what we really need to escape the housing affordability death trap.
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This week we consider the impact of the Trump Tariffs on Property in Australia, look at the latest numbers and where property demand is coming from, and also consider some of the risks embedded in your homes.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
The trends are clear, in many western countries around the world, home prices have been rising, and in recent years rising fast. The underlying drivers are the freeing up of mortgage markets, and lower interest rates, allowing more people to borrow more, which is why debt has been rising too. As you know I have long argued the rise in home prices to stupid levels is all due to the deregulation of the financial system, driven by neo-liberal thinking which leaves ordinary people in the dust. Greater debt driven demand lifts prices.
Of course, the Government is fixated on the supply side story. And we can expect they will peddle this hard into the election. The government’s housing policies include 1.2 million new homes built by mid-2029, a $9.3 billion agreement with states and territories to support social housing and homelessness services, a scheme to help 40,000 households purchase a new or existing home, and tax incentives to support investment in new build-to-rent developments. One of those latter tax incentives includes increasing the capital works tax discount depreciation rate from 2.5 per cent to four per cent.
The other factor in play is high migration, another demand driver, with another 2 million people expected to land in the country over the next few years. This was subject to interesting questioning from Senator Bragg in Estimates recently. Astonishingly, Treasury has not considered the impact of high migration on housing demand (and implicitly) price.
But what of the tax breaks for investors? Well according to a new report from Australian Council of Social Service (ACOSS), Two tax breaks are “disproportionately” benefiting Australia’s richest while simultaneously fuelling the housing affordability crisis. The report criticises the capital gains tax deduction for property, where only 50 per cent of capital gains made from an asset are taxed when it is sold, and negative gearing, which allows investment expenses to be deducted from income.
ACOSS says the wealthiest 10% of households own two-thirds of all investment properties and are receiving 82% of the $16 billion in tax relief the two breaks provide.
While I absolutely agree the investor tax breaks are part of the problem, unless we address too high migration, control unsustainable lending growth, and also work on building enough new homes to meet new demand, the affordability situation will continue to deteriorate.
As a result, many will choose to leverage up just to get into the market and out of the rental sector. Government policy is at fault here. And they appear to be avoiding the elephants in the room. Address too high migration, and control unsustainable lending growth.
I wonder if this is because many politicians are also property investors?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
As expected, and covered in my earlier posts, due to poor Government Gas policy over a long period leading to a Gas cartel, Electricity bills will rise by as much as 9 per cent from July 1, the Australian Energy Regulator has declared. The Australian Energy Regulator (AER) released its draft decision “default market offer” (DMO) today, which will see price caps for customers on standing retail plans lifted starting from July 1.
As a result, prices are expected to rise between 2.5 per cent and 8.9 per cent for customers in NSW, south-east Queensland, and South Australia. Small business customers face prices increases of between 4.2 per cent and 8.2 per cent.
“We’ve seen cost pressures across nearly every component of the Default Market Offer (DMO), and we have given careful scrutiny to every element of the DMO cost stack to ensure prices are a reasonable reflection of the costs of a retailer to supply electricity.” AER said.
The solution is simple, end the gas cartel, reserve gas for domestic use, rather than deciding to let international corporations hold Australian households to ransom, and import gas at international prices. And no, the answer is not to use more public money to subsidise the profits of the cartel, while appearing to sound caring to households.
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This is an edited version of a live discussion as I go through the latest from our household surveys to end February 2025. In this show we look in detail at the post code level data, and specific post codes to examine, across income, financial stress, mortgages and rents and property price movements ahead.
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In today’s show I want to delve into three important issues, which I do not think the mainstream media gave sufficient weight and consideration to.
The first relates to the market interest rate assumptions which drives the RBA models, the second concerns the use of cash and the impending upending of current arrangements in July, and the third, the question of the fate of Australia’s Gold, and what is happening to physical Gold more broadly. For each I will add my own analysis.
So as always, as questions are asked and answered, actually more questions are raised. But to me these three questions, the link between Bank modelling and market assumptions on interest rates, the use and availability of cash, and the physical gold market, are all ones to watch.
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This is an edit of a live discussion as I walked through my latest analysis at a post code level, looking at financial pressure, and future price scenarios. We focused specifically on property investment by looking at gross and net rental yields, including heat maps of major urban centers. Some are deeply under water!!
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With Parliament back after the summer break, if Parliamentary Question Time anything to go by, the issue of costs of living pressures will be front and centre of the upcoming campaigns. Worth reflecting how effective Trump proved to be in the US asking the question, are you better off now, or previously!
Of course words and figures can differ, not least because the data may not all point in the same direction, and can be spun vigorously. For example, inflation may be coming down from its highs, but the accumulated additional costs of pretty everything still hangs heavy on household budgets. And whilst cost of living support, like power rebates or rental assistance can help fudge the headline figures and even perhaps bounce the RBA into a rate cut, data still shows we have a problem.
For example, the latest from my household surveys, looking at financial stress in cash flow terms shows that around 76% of those in the rental sector are under pressure, and just under half with mortgage payments are in the same boat. Others are doing significantly better, so averaging masks the extremes we are seeing.
The latest data from the ABS on Household spending shows that it rose 0.4 per cent in December, seasonally adjusted following a 0.8 per cent rise in November and a 1.0 per cent rise in October. Or in other words a slowing of spending.
Today the ABS published their Selected Costs of Living Cost Indices. Over the twelve months to the December 2024 quarter, the LCIs rose between 2.5% and 4.0% despite all the Government support measures. Of the household types, Employee households had the largest annual rise in living costs, up by 4.0 per cent, with mortgage interest charges up 14.7 per cent over the year.
Cost of Living could be fixed by a stroke of a pen, if the Government reserved east coast gas for Australians, rather than shipping it off shore, (or worse also having to re-import gas at international prices), and also start taxing those exports properly. If politicians are serious about costs of living why not start Question Time with a gas related debate? The answer is simple, neither side of politics wants to admit their policy errors in this space, preferring to gaslight costs of living pressures for political advantage. This will I think come back to bite them as households wake up to the truth. Much of the costs of living pain are self-inflicted due to plain stupid policy and self-interest.
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