I caught up with Peter Marshall from comparison site Mozo.
He has been working in the Australian banking and finance industry for over 20 years and oversees Mozo’s extensive product database. He is regularly sought out for his expert commentary and analysis on banking and interest rates trends by print, radio and TV media.
Today we discuss the prospect of higher mortgage rates ahead and what people can do to prepare.
The latest analysis of the financial aggregates data from the RBA and APRA to end March 2022. We also look at the latest price trend data. Looks like things are slipping.
Go to the Walk The World Universe at https://walktheworld.com.au/
In this week’s market review we look at the action around the world, starting in the US, Europe Asia and Australia, and looking at Gold, Oil and Crypto in passing.
The news is not good, for those believing in a return to Bull markets, supported by a Fed Put. Actually, with inflation running hard, Central Banks will lift rates, and as yet markets are not fully pricing the risks of this change. Why would they, as there are many who profit from transaction, any transactions, so of course they are talking their book. Hope that the Fed can lift rates to counter persistently high inflation without tipping the US economy into a recession are fading, further fraying market sentiment.
CONTENTS
0:00 Start 00:15 Introduction 1:00 Earning Season 1:50 Sentiment Surveys 2:54 US Growth and PCE 5:57 US Markets 9:20 Monetary Policy 12:50 Oil 13:15 Gold 16:10 Silver 18:20 UK Home Values 21:08 Europe 22:27 Asia 25:35 Australia 28:25 Crypto 30:29 Conclusion And Close
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Those following my channel will know of the modelling which shows the strong link between credit availability and home prices. We know that when credit is tight, and the rate of change in credit is negative, home prices fall. And we are seeing this in spades now in New Zealand.
So today I want to explore some markers in New Zealand, and why property will fall further and faster.
Go to the Walk The World Universe at https://walktheworld.com.au/
The rental situation is getting worse across the country driven by the pandemic-induced shrinkage in average household size as people demanded more space. This has effectively reduced the number of homes available to rent.
Plus many investors are lifting rentals to try to turn unprofitable investments positive (especially as capital gains on many apartments remains a pipe-dream).
CoreLogic reported that rents across Australia continue to explode, surging by 8.7% nationally and by 10.7% across the combined regions in the year to March 2022.
With rental growth (2.6%) outperforming value growth (2.4%) over the three months to March, national dwelling yields have recorded a one basis point rise since December (3.22%) and two basis points since reaching a new record low of 3.21% in January and February. Despite the recent rise, national rental yields are still 32 basis points below the yield recorded this time last year (3.55%).
But BTR is another fake ‘affordability’ policy as a new report in The AFR suggests recent Australian BTR projects charging a 20% premium on traditional rentals.
Its frankly a mess, with long standing consequences for households across the country. Its shameful.
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Edwin visited me in the DFA studio today for our weekly property chat. We discussed the political ball game around property, news from China about migration to Australia, and how to react to the latest market information.
Is there a path to higher home prices ahead?
Go to the Walk The World Universe at https://walktheworld.com.au/
The REINZ came out last week with their report for March 2022, which they say solidifies the changes in the market seen over the past months as pressure on property prices eases, inventory levels increase, demand softens and sales activity decelerates.
“There is a pervasive feeing of uncertainty, and people are hitting pause. While more stock makes this a favourable market for buyers who find themselves in a position to wait for the right property and negotiate — particularly buyers with their finances lined up — many are balancing fear of over paying with an outlook of further interest rate increases. Conversely, sellers are holding out for the right price in a changed market.
So, we look at the latest numbers and consider the consequences.
Go to the Walk The World Universe at https://walktheworld.com.au/
The New South Wales government has sold off $3bn worth of social housing during its decade in power, while failing to meet its own targets for new properties.
New figures released through parliament this week show that since it was first elected in 2011, the Coalition has sold off 4,205 social housing properties across the state.
The sales have added about $3.5bn to the government’s coffers over the same period.
But while the government said all of those funds were used to prove “more, and better” social housing stock, data for new social housing constructions reveal the government has fallen well behind its own targets for new dwellings.
In 2016, the Coalition pledged to build 23,000 new social housing dwellings in the next decade as part of its Future Directions housing strategy. It committed to funding new social housing construction through the $22bn Communities Plus program.
But eight years on, with more than 50,000 people on the social housing wait list in the state, the Communities Plus program has achieved only 10% of that goal.
There was a significant piece in The Conversation by Claire Dale, Research Fellow At The University of Auckland – titled The coming storm for New Zealand’s future retirees: still renting and not enough savings to avoid poverty
A large number of New Zealanders are facing a perfect storm at retirement, with minimal savings and no house, raising the risk that thousands will enter old age in poverty.
According to the latest retirement expenditure guidelines from Massey University, a two-person retiree household living an urban “choices” lifestyle, which includes some luxuries, would need to have saved NZ$809,000. In the provinces, a couple would need to have saved $511,000.
New Zealanders have traditionally relied on owning a home to support themselves during their retirement years. But many of the New Zealanders now aged between 50 and 65 – a cohort of almost half a million people – will go into retirement as renters after skyrocketing house prices over the last three decades put home ownership out of reach.
At the same time, this generation were already working adults when the Labour government introduced KiwiSaver in 2007, and are less likely to have a significant savings cushion.
Go to the Walk The World Universe at https://walktheworld.com.au/
