In this show we will look at some of the recent data relating to the New Zealand economy, which is sitting in a high interest rate, recessionary condition, as the Reserve Bank of New Zealand wrangles inflation towards its targets. We saw a significant rise in people leaving the country, with New Zealand Citizens voting with their feet!
So, we will look at the latest on property prices, retail spending and the latest inflation and migration updates. Overall, things remain very tough, though inflation while remaining sticky, is easing slowly.
So, standing back, clearly the New Zealand economy is not out of the woods yet, but the Reserve Bank of New Zealand’s approach of lifting rates higher than Australia does appear to be pushing inflation in the right direction. The uptick in exits from New Zealand suggests perhaps that some are deciding to jump ship, because households are clearly feeing the pressures. And recent policy changes will likely continue to reduce net overseas migration, with potentially significant impacts on the jobs market, and demand for property.
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After a week away, we’re back with another episode as we look at the stupidity in the property sector, as some are piling into the investor sector, while others are trapped due to the higher interest rates, and nowhere to go.
Go to the Walk The World Universe at https://walktheworld.com.au/
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.
Data from my surveys, as discussed this past week, along with other market data shows we have a very divided housing market, with on one side of the ledger many households under significant pressure and begin forced to sell up, while watching their property values slide, while on the other side property investors are still piling in competing with owner occupied buyers, especially at the lower end of the market and bidding prices higher. Actually of course there are many micro markets across the country, and so any headline “data” on rises or falls mask important differences. Housing isn’t just the great Australian barbecue-stopper. It’s our greatest pain point, too. All this only days after Australia’s GDP figures grew at the lowest rate in three decades, excluding the COVID-19 pandemic, and as traders push out rate cut expectations well into next year.
So today I will be looking at the latest signals from the data relating to mortgage prisoners, forced sales, credit growth and investor activity, to provide context for the misleading headlines we see on the property portals.
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.
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.
Another week, another Rant from our Property Insider Edwin Almeida, as we look at the disruption in the property market, the fall out in terms of human impact and the weak responses from Government.
Housing is in crisis in Australia, its too expensive and relative to population there is not enough of it. As I discuss with independent Journalist Tarric Brooker last week, though shockingly, we have built more homes per 100,000 people than Canada, The US and the UK. In other words, we have a greater proportion of our economy dedicated already to housing construction, with perhaps 1.35 million people working in the sector. And we also know completion times are blowing out now, thanks to poor supply chains, lack of available labour, and poor-quality construction. In NSW half of high-rise projects have severe defects.
But the Government wants to push the supply-side levers some more, as exemplified in their Attachment to the budget papers: Statement 4, Meeting Australia’s Housing Challenge from the Treasury.
It starts out “Australia has a housing shortage. There are not enough homes being built in the right areas to meet the needs of our communities. This statement focuses on the reasons for the current undersupply of housing, how it affects affordability, and the changes required to more quickly unlock supply to meet the housing needs of all Australians. It also sets out how the Government’s policy responds to these drivers of undersupply”.
This undersupply they say accounts for the increases in rents, mortgage repayments and house prices.
Talk of course is cheap, but will this translate into real actions? And what about the elephant in the room because of course, the focus should be to curtail migration from is very high current levels, and bring demand back closer to long term averages, and over the budget period both sides of politics have to a degree been talking about this, though, as I discussed in my recent show The Migration Question Amplified; But Not Tackled… By Anyone!, it’s a battle of announcables, with numbers being banded about.
But my take is that neither side of politics are really wanting to take this on seriously, despite the direct link to higher inflation. The net result will be higher inflation for longer, requiring higher interest rates than otherwise needed.
In this weeks Rant Edwin and I discuss the fallout from the budget, the latest developments in non-approved extensions, and trends from the WeChat Chatters and Silent Tigers as Australian property is still used to launder money.
You can also join Edwin and I for a live show on Tuesday 21st May at 8pm Sydney as we discuss how to prepare your property for sale. You can ask a question live: https://youtu.be/38o1E_69o3c
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.
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.
Housing affordability is shot, as we have been discussing, thanks to demand stoked by high migration, higher lending multiples as the financial system was deregulation, and higher interest rates mirroring the RBA’s battel to tame inflation. As a result first time buyers are delaying their purchase by several years, and more borrowers are leveraged up to the gills, despite first home grant schemes, and shared equity schemes, which as the Productivity Commission showed did help a few get into the market, but lifted prices for everyone else, so did not help structurally.
Australians are already among the highest carriers of household debt in the world. In fact, according to Domain’s 2024 First Home Buyer Report, an entry-price home in Melbourne costs $678,000. In Sydney, it jumps to $927,250. Looking outside the two major cities reduces the cost to $545,000. To be lucky enough to secure any of these options, a 20 per cent deposit will set you back between $109,000 and $185,000.
So where do prospective buyers get that sort of cash? Well some might be able to get help from the Family Bank, as I showed recently, the average is more than $106,000 now, great if you have wealthy parents. Others may be able to save, but it’s a long road, and whilst interest rates are higher than they have been for some time on deposits, it will take years, and longer still if rates are cut later. Then of course there is the old chestnut, use accumulated super.
This week we got a draft report from the parliamentary committee chaired by prominent superannuation critic Andrew Bragg which has upped the ante on the Coalition’s super for housing policy, suggesting first home buyers should be able to withdraw all their retirement savings to buy a house or use it as collateral to help borrow.
My view is that this is actually a proxy political war on the purpose and nature of superannuation, rather than a real honest discussion about how to fix the broken property market. It is in essence a mixture of misdirection – look over there, not here, and avoid the more critical issues of migration control and increased and better-quality supply of affordable housing. Or in other words, it’s a case of fiddling while Rome burns, again.
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Today’s post is brought to you by Ribbon Property Consultants.
According to a recent report, Australian capital cities are becoming more segregated along socioeconomic lines. And the trend is worst in Sydney. Inequality is rising.
The Conversation published: Our cities are widening the divide between the well-off and the rest. How can we turn this damaging trend around? Written by three researchers from the University of Sydney.
They talked about the so called “latte line”, the infamous, invisible boundary that divides Sydney between the more affluent north-east and the south-west. Historically, people north of the line enjoy better access to jobs and education, and can capitalise on rising property wealth. This has reinforced economic inequality.
Sydney emerged as the most segregated and unequal of the five cities. The latte line is getting stronger. Other cities also showed rising inequality.
Bad policy is creating a more and more unequal society. The traditional idea of Australia as an egalitarian society is dying. The property market is the problem, but Governments are ignoring the consequences, and focussing on “announcables” as we discussed yesterday. We need to do better!
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Those following my regular Property Rants with Edwin will know we have been speculating that there would be budget measures announced next week to help property developers. Well, they could not wait it seems…
The 600,000 plus migrants arriving in Australia this past year are continuing to put more pressure on the housing sector, and helps to explain the fact that rising rents, interest rate hikes and surging living costs in the past few years have inflamed what was already among the world’s least affordable housing rental markets, where record numbers of people can no longer afford to buy after a surge in house prices.
In fact, the federal government wants to find tens of thousands of workers to help build new homes in an attempt to address Australia’s ongoing housing crisis, reacting to pressure from the Construction sector, which already employs about 1.35 million workers across the country.
Of course, the logical step would be to right size migration to match the capacity to build new homes, which with a following wind might be around 150,000 each year. That should be core Government Policy. But no.
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Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
