Another deep dive into property and politics with our Property Insider Edwin Almeida, as we look at the latest spin on affordability and “hot suburbs”.
The drive towards high-rise density has consequences, but even the quality of low-rise is a concern. Meantime, listings are still in the doldrums, while rental availability is largely shot.
And recent DFA coverage stirred up the Chatterers….
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Today’s post is brought to you by Ribbon Property Consultants.
Our latest Friday Afternoon chat with journalist Tarric Brooker as we look at the current data, which questions potential rate cuts, and housing trends, as demand stays strong while supply is limited.
Below the water line we examine some of the underlying assumptions behind the numbers, and how politics have changed.
Worse, the structural issues can be traced back to a series of political decisions, which were policy errors – when will they come clean?
Tarric’s charts are here: https://avidcom.substack.com/p/dfa-chart-pack-12th-april-2024 if you want to follow along.
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Higher for longer is back baby, following the latest CPI data from the Bureau of Labor Statistics which came out today, for March. It was significantly up on expectations, the third month in a row this has occurred. This signals a fresh wave of price pressures that will likely delay any Federal Reserve interest-rate cuts until later in the year, or even later into next year.
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Wherever you look, the news is not good for those wishing to see housing affordability relief.
First demand for rentals continues to be powered by the overseas influx. New data from the Department of Home Affairs shows that at the end of February, the number of international students in Australia hit a record high of 713,144, whereas the number of temporary migrants in Australia hit a record high of 2.8 million (nearly 2.4 million excluding visitors).
Or put it another way, the number of student visa holders in Australia is running around 80,000 above the pre-pandemic peak, while the number of temporary visa holders excluding visitors is around 400,000 above the pre-pandemic peak.
Then we can turn to the question of new housing supply. I have covered before the fact that the country is littered with half-completed construction projects, many of which are competing for labour and resources with the large number of government and commercial projects also currently running. This crowded out home builders as the major projects sucked in labour and drove up its cost.
But we also continue to see more building firms going under. In the light of this, perhaps we should not be surprised that the total number of dwellings approved fell 1.9 per cent in February (seasonally adjusted), after a 2.5 per cent fall in January, according to data released on Thursday by the Australian Bureau of Statistics (ABS).
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Today’s post is brought to you by Ribbon Property Consultants.
The ABS released more data on Thursday from which we can deduce that despite some headline growth in spending thanks to the Taylor Swift events, underlying growth in retail turnover was up only 0.1 per cent in trend terms so after a period of higher volatility from November through to January, underlying spending has stagnated.
This is despite a growth in paper wealth – up which was 7.8 per cent over the past year, thanks to a large boost from rising house prices and domestic and overseas share markets. But we also saw a rise in household borrowing driven by continuing demand for housing amid strong population growth and a seasonal boost from spring housing market sales also drove household borrowing in the December quarter.
Under the hood, we see continued pressure on many households whose wages are not keeping up with living costs – inflation as I discussed yesterday remains too high, while the asset distribution across households is further distorting between the haves and have nots. Many consumers are clearly struggling under the weight of soft income growth, mortgage repayments, rents, income taxes, and overall cost-of-living pressures.
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Today’s post is brought to you by Ribbon Property Consultants.
Digital Finance Analytics (DFA) Blog
Pressure: Retail Spending Stagnates, Despite “Growth” In Wealth!
We got the latest monthly data on inflation on Wednesday, and it came in a bit below market expectations, standing at 3.4% unchanged in February and has been 3.4 per cent for three consecutive months according to the ABS. Monthly data does not cover all the categories, so results are always a bit uncertain.
But just to be clear, prices are still rising faster than the RBA’s target, and while the data is volatile, there is clearly more to do to get to band. Also, I believe real inflation as experienced by many households are significantly higher than the official numbers. When excluding volatile items, the annual rise eased to 3.9% from January’s 4.1%, still well above the RBA’s 2-3% target band. Annual inflation excluding volatile items has continued to slow over the last 14 months from a high of 7.2 per cent in December 2022.
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BlackRock co-founder and CEO Larry Fink, in his annual letter to shareholders has rattled some important cages, even if you can see self-interest shining through.
He highlights a couple of not necessarily unrelated issues. First, he is frightened by the US public debt situation, and second he warns of a looming “retirement crisis” facing the US and called on baby boomers to help younger generations save enough for their own futures.
Young people “have lost trust in older generations,” Fink wrote. “The burden is on us to get it back. And maybe investing for their long-term goals, including retirement, isn’t such a bad place to begin.”
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Digital Finance Analytics (DFA) Blog
No Hope And Massive Debt Is Not A Good Recipe For The Future!
BlackRock co-founder and CEO Larry Fink, in his annual letter to shareholders has rattled some important cages, even if you can see self-interest shining through.
He highlights a couple of not necessarily unrelated issues. First, he is frightened by the US public debt situation, and second he warns of a looming “retirement crisis” facing the US and called on baby boomers to help younger generations save enough for their own futures.
Young people “have lost trust in older generations,” Fink wrote. “The burden is on us to get it back. And maybe investing for their long-term goals, including retirement, isn’t such a bad place to begin.”
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edited version of my latest live discussion with Tony Locantro, Investment Manager at Alto Capital as we look at the current state of the markets, and the consequences of the rapid rate hikes and rising debt. Tony has a unique way of seeing things, and his insights are always welcome!
This is an edited version of my live discussion about the latest from our surveys, as we look at mortgage, rental, investor and financial stress across the country, down to a post code level.
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Digital Finance Analytics (DFA) Blog
DFA Live Q&A Replay: Household Financial Stress Analysis: Deep Dive
