Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Following my live show on Tuesday I had a number of requests for mapping of the Rental Stress story across the country. So in this show we look at the distribution of rental stress both in count and percentage terms, based on DFA modelling and surveys.
Live show was here: https://youtu.be/c8rTWEEw2KU
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Can the Australian economy be weak, and strong at the same time? Or which is it? This is an important question because the answer will determine the future policy direction of interest rates, and the well-being of ordinary Australians. So I am going to do a deep dive on this in the light of the latest employment and wage rise data from the ABS.
While The RBA has made inroads into getting inflation under control, at 3.5 per cent, underlying inflation still remains above the central bank’s 2 per cent to 3 per cent target band. And even though the jobs market has softened, it is still far stronger than almost any time since the 1970s as data out today shows.
Yet Consumers have cut back sharply as they try to cope with 13 interest rate rises by the RBA and this decline in spending has caused economic growth to grind to a halt. On an annual basis, the economy grew by just 1 per cent in the year to June, down from an average of 2.7 per cent over the past 20 years. Excluding the pandemic, that marks the slowest rate of growth since the 1990s recession. And household financial stress based on our analysis is at peak as we discussed in my live show this week.
So we have an economy driven into overdrive by high migration and big government spending, forcing interest rates to stay higher for longer, yet with a low unemployment rate and people working till they drop. None of this helps to improve productivity the share of the economic cake continues to shrink on an individual basis. And those in the rental sector or with a large mortgage are under the pump.
My point is, bad policy over a couple of decades have got us to this point, but unless we radically change direction, this Messy And Complicated journey will continue to the detriment of many ordinary Australians and businesses. There is no Goldilocks zone here.
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This is an edited version of a live discussion as we explore the latest DFA modelling of Household Financial Stress. We will have the post code engine online, and given the higher for longer trends in interest rates, things are getting “interesting”!
You can ask a question live!
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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.
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
I caught up with Troy Harris a Crypto Advocate and Author of “CRYPTO NEW RICH” in the week Bitcoin rose above US$80,000 after the recent Trump victory.
We explored what is going on here, and what factors could drive the price of Bitcoin even higher.
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Go to the Walk The World Universe at https://walktheworld.com.au/
In our first post Trump result Rant, Edwin and I consider the implications for property as rates higher for longer seem to be the order of the day. But some markets will perhaps still be buoyant because demand is so strong. Meantime we also look at how the property portals are being flexible with the truth, and we chat about people making poor property decisions, because they assumed….
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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.
We are at a significant point in the spring auction market as the prospect of early interest rate relief for home buyers becomes more uncertain in the months ahead, even though weekly clearance rates are so far holding steady, as overall property listings rise.
But within that less expensive property is shifting faster, driven by a further rise in those buying with the help of the family bank – with money from parents, grandparents or siblings, easing the purchase path, whilst other first time buyers are clubbing together to become joint owners of a new home, despite the potential risks.
More generally it’s another symptom of the broken housing market. If you want to learn more about this, and get the latest on our modelling, join us next Tuesday for my live stream at 8pm Sydney, where you can ask a question live. You can see the latest post code level analysis and we will also look at the broader trends.
This is a time for caution, given the rising levels of uncertainty, but that said, for many jumping from the rental sector to buying their own home could be equivalent to jumping from the frying pan into the fire in the current environment.
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.
In this week’s market update I am going to focus on the path of interest rates, as over this past week midst the US election we got a swathe of Central Bank rate decisions. The RBA held the cash rate on Tuesday, but the Fed, the Bank of England, Sweden’s Riksbank and the Hong Kong Monetary Authority all cut.
While Donald Trump won’t return to the White House for another 10 weeks, he’s already casting a shadow over central banks and with Trump 2.0 expected to boost growth and risk returning inflation, and actually there was (reasonable) speculation that the Fed might not cut rates after all, or at least hint heavily that it would pause at next month’s meeting. Certainly, some economists now expect fewer rate cuts from the Fed next year as trade tariffs may boost US inflation. That could reshape the easing path for central banks around the world, and add currency pressure on emerging markets.
Australia’s economic output could fall between 0.8% and 1.5%, or $20 billion to $37 billion if Trump imposed a suite of his economic policies including slashing America’s 21 per cent corporate tax rate to 15% KPMG estimated.
So all up, the level of uncertainly ahead has been amplified by the Trump victory, and the consequences will spill over into other markets. But we can expect higher interest rates in the months ahead, which is not good for those holding on by the skin of their teeth. This is going to get messy.
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Journalist Tarric Brooker and I look at the US election results, and consider the implications for us all. Things have just changed profoundly.
See the slides here: https://www.burnouteconomics.com/p/dfa-chart-pack-us-election-special
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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
This is an edited version of a live discussion in which I discuss the US election results, and then I am joined by award winning mortgage broker Chris Bates as we answer some important questions about mortgage applications and underwriting. How do we get the best results, and are all mortgage brokers the same?
Chris is Managing Director at Flint Group https://flintgroup.au
Chris started as a financial Adviser back in 2007 and sold his Financial Advise business in 2020. Chris has grown into one of Australia’s top Mortgage Brokers and is passionate about taking the product providing industry to a trusted advise base profession.
He is known for regularly airing his views on sound property investing on both LinkedIn and popular industry podcasts The Elephant in the Room and Australian Property Podcast.
http://www.martinnorth.com/
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.
The early results from the US election indicates a strong Trump win. It is clear that households have reacted to the significant rises in costs of living, and put the economy and migration ahead of other issues such as rowe v wade related issues.
It’s the economy stupid, a phrase coined by James Carville in 1992, when he was advising Bill Clinton in his successful run for the White House.
Forget that, and you get ejected as Rishi Sunak in the UK and Biden in the US can attest. And the focus is not stock market performance, but whether people feel better off or worse off than previously. There are of course always excuses, such COVID and wars, but at the end of the day personal finances lead. This is important given the upcoming Australian election and to that end, its worth underscoring that while the first wave of inflation was global and pandemic-related. But later waves were home grown. Albo made Australian inflation much worse than it needed to be, drove interest rates higher than they needed to be, and gutted households much more than they needed to be!
All up, the real costs of living are still significantly elevated compared with the start of Albo’s Government, so they risk becoming a one term Government, with poles neck and neck at the moment.
This helps to explain the move announced over the weekend to reduce HEC debt and offer more TAFE places, in an attempt to paper over the damage. But Albo, just remember it’s the economy stupid!
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Go to the Walk The World Universe at https://walktheworld.com.au/