"Intelligent Insight"
Join us tonight at 8pm Sydney for a live discussion about property trends, and household stress. You can ask a question live, and we will have the post code engine online so we can look at specific post codes and also our stress mapping across the country.
Given the 50 basis point rate hike today, this is an important show.
The recent release of 2021 Census data revealed a shocking “one million homes were unoccupied”.
This statistic sent housing commentators, government agencies and policymakers into a spin. At a time of significant housing shortages, this extra million homes would surely make a big difference. They could provide housing for some homeless, ease the rental affordability crisis, and get first-home owners into their first home. There has been a great deal of speculation about how this has happened. Has it been caused by overseas millionaires buying up housing and leaving it as an empty investment? Is it Airbnb taking up homes that could be used for families? Or are cashed-up Gen-Xers double-consuming by living in one house while renovating another?
So, why were 1,043,776 dwellings empty on census night?
My latest chat with Edwin as we discuss politicians and their property portfolios, as first time buyers feel the pressure, and mortgage prisoners are a things. We also discuss some of the strategies to make sure agents are working for you.
https://www.ribbonproperty.com.au/
Go to the Walk The World Universe at https://walktheworld.com.au/
Are rents really rising as fast as being reported?
A recent The Conversation article suggests no. But on the other hand our data tells us much more about the truth of the rental crisis.
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.
I caught up with Cameron as he republishes his book from 2017 Game of Mates: How favours bleed the nation as Rigged “How Networks Of Powerful Mates Rip Off Everyday Australians”.
This book will open your eyes to how Australia really works. It’s not good news, but you need to know it.’ – Ross Gittins ‘
You’ll be shocked at how far the Mates have their hand in your pocket.’ – Nicholas Gruen
Australia has become one of the most unequal societies in the Western world, when just a generation ago it was one of the most equal. This is the story of how networks of Mates have come to dominate business and government, robbing ordinary Australians.
Every hour you work, thirty minutes of it goes to line the Mates’ pockets rather than your own. Mates in big corporations, industry groups, government departments, the halls of parliament and the media skew the system to suit each other. Corporations dodge taxes, so you pay more. You pay more for your house and higher interest rates on your mortgage, more for your medicines and transport, and more for your children’s education and insurance, because the Mates take a cut.
Rigged uncovers the pattern of political favours, grey gifts and information-sharing that has been allowed to build up over two decades. Drawing on extensive economic research, it exposes the Game of Mates as nothing less than cronyism on a grand scale across Australia and how we have fallen behind other countries in combating it.
https://www.bigw.com.au/product/rigged-by-cameron-murray-and-paul-frijters/p/235646
We also discuss the recent Canberra event and housing policy in general.
Dr Cameron K. Murray is a Research Fellow in the Henry Halloran Trust at the University of Sydney and an economist specialising in property and urban development, environmental economics, rent-seeking and corruption. Professor Paul Frijters teaches at the London School of Economics and was previously Professor of Health Economics at the University of Queensland.
Go to the Walk The World Universe at https://walktheworld.com.au/
As I discussed in a recent post Australia is starting to look at a Central Bank Digital Currency programme, with a focus on retail customers. The design parameters and business case are yet to emerge, and I hope there will be considerable consultation around privacy, free choice and the continued used of cash.
Around the work, work on CBDC’s are progressing. China’s e-CNY, or digital yuan, project is essentially ready to go, with the country going slow to ensure mass adoption is effectively in place before the launch, on which it has placed a lot of prestige.
The European Central Bank (ECB) has been an enthusiastic supporter of a digital euro, calling it “the holy grail” of cross-border payments. “To ensure financial stability in this digital age, it is crucial that we all still have easy access to central bank money, which is the foundation of our currency,” ECB President Christine Lagarde, said in July. “The digital euro can achieve that.” The ECB’s crypto front man Fabio Panetta said in May that a digital euro could launch within four years.
India and Russia are planning CBDC launches sooner than that, with India saying a CBDC could launch as soon as 2023. Almost all the G20 members are working on a CBDC to some degree. Sweden, South Korea, Thailand, Malaysia, Saudi Arabia and Brazil are all fairly advanced, while Africa’s largest country, Nigeria, launched its eNaira CBDC almost a year ago. Both South Africa and Ghana have live pilots up and running.
And more than a few governments have been clear that challenging the dollar’s hegemony is a goal, with the ECB’s Lagarde saying a “digital euro would also help to avoid market dominance.” So you could argue that Central bank digital currencies (CBDCs) have reached a critical mass, and enough major economies are challenging the greenback’s status as the world’s reserve currency (and all the power that comes with it) to shift the debate to matters of national prestige. Which then takes us to the US, where things are also getting started.
To that end, I want to discuss remarks made by Fed Governor Michelle Bowman where she suggested that she believes the FedNow real-time payments system will make a digital dollar unnecessary. But, perhaps the arguments that the U.S. will need a CBDC to defend the dollar’s place as the world’s reserve currency are winning, for reasons that have nothing to do with an actual need for a digital dollar or real-time payments. The financial superpower can’t afford to be left behind.
Go to the Walk The World Universe at https://walktheworld.com.au/
This past week has seen a significant shift in market sentiment, driven off the back of hawkish tones from Jackson Hole, as Central Bankers underscored that squashing inflation was their main task, whatever the cost. Markets had been betting on a Fed Pivot soon (recalling the last cycle where markets had their way and the Fed turned), hence the bear market run-up in the past couple of months, but that for now is in tatters.
Further falls into a typically wobbly September can be expected. Mind you, the FED has not explained why their forecasts were so off, so it does beg the question as to whether we should believe them now. And consider the wider fallout globally, as higher rates and a strong dollar will put many markets and countries under pressure.
Note the swing between the USD and Yuan, and the Yen. Perhaps this is not accidental. Plus, the markets are worried about “China slowing, euro zone recession and a hawkish Fed”. Equity funds recorded the fourth largest weekly outflow of 2022, while bond funds saw investors pull out money for a second straight week.
Go to the Walk The World Universe at https://walktheworld.com.au/
Our latest Friday afternoon chat, picking over the latest charts, which are telling a confusing story, as Central Banks continue to hike into a head wind. How will this play out?
You can get Tarric’s charts here: https://avidcom.substack.com/p/charts-that-matter-2nd-september and follow him on Twitter @Avidcommentator
Go to the Walk The World Universe at https://walktheworld.com.au/
Economists, by nature or nurture, are like living and breathing versions of the Picasso paintings that show both sides of a solitary image. So well-known is their use of the phrase “on one hand … but on the other hand,” that President Harry Truman once famously asked for a one-armed economist to provide him with economic counsel.
With that caveat, New Zealand is I think a Petrie dish for how tight monetary policy plays out. The Reserve Bank of New Zealand started lifting rates earlier than other central banks last year and are set on more rises ahead.
Now according to a Reuters poll, New Zealand’s house prices are forecast to fall 10% this year and 5% next as aggressive interest rate hikes take some heat out of a blazing housing market, but not enough to solve the ongoing affordability crisis. And while the Reserve Bank in New Zealand does need to take home price movements into consideration when making interest rate calls, it seems to me that the objective of snuffing out inflation is number one, two and three, and to that end, if higher unemployment, or lower home prices are a necessary consequence then so be it.
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 update the latest from our models and surveys, which now includes the ABS Census data from last year.
Unfortunately mortgage and rental stress continue to track higher, thanks to higher interest rates and rising costs of living.
Many household have large debt burdens. The National Debt Helpline line on 1800 007 007 is an excellent place to go to get free advice.
About Us
National Debt Helpline is a not-for-profit service that helps people tackle their debt problems. They are not a lender and they don’t ‘sell’ anything or make money from those in debt. Their professional financial counsellors offer a free, independent and confidential service. They are simply there to help you get back households on track. Beware of some of the other paid services which are found on the internet.
Go to the Walk The World Universe at https://walktheworld.com.au/