UK house prices fell at their sharpest annual pace since 2009 after soaring mortgage rates curtailed how much buyers could afford, Halifax, one of the nation’s biggest mortgage lenders said today.
Halifax said the average value of a home fell 1.9% in August alone to £279,569, the sharpest monthly pace since November. It left prices 4.6% lower than a year ago when the value of UK property peaked.
The Bank of England has raised interest rates 14 times since late 2021 tame inflation, and that’s straining the finances of consumers already hit with higher food and energy bills.
As a result, the market is slowing, with year on year property transactions down 21.7%, mortgage approvals also down 21.7% and new buyer enquiries down 45%.
“We do expect further downward pressure on property prices through to the end of this year and into next, in line with previous forecasts,” Kim Kinnaird, director at Halifax Mortgages.
Yesterday I went through the latest GDP outturn, and underscored the per-capita recession which is now in play across Australia.
Others see the same, with CBA’s economics team tipping that Australia would plunge deeper into a per capita recession as aggregate GDP growth falls below 1% while population growth remains above 2%:
They said that “Real GDP per capita declined by 0.3% in the quarter, following the same decline in Q1 23. Real GDP per capita is 0.6% below its peak in Q4 22 and 0.3% lower over the year”.
“Population growth has been much stronger than anticipated by policymakers. Working-age population has increased by 2.8%/yrin July. The increase in population is supporting overall GDP, but the economy is contracting on a per capita basis”.
http://www.martinnorth.com/
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Today’s post is brought to you by Ribbon Property Consultants.
Almost one in three Australians are struggling to make ends meet, as cost-of-living pressures push more people to renegotiate bills, cut back on groceries and access their superannuation early. And one in five hit up friends or family as times tighten.
About 30 per cent of Australian adults find it difficult or very difficult to get by on their current income, according to a quarterly poll by the Australian National University.
Borrowers have been hit with 12 interest rate rises since May 2022 as the RBA tries to get on top of the most acute inflation outbreak in decades.
Financial stress is on the rise, with two-fifths of renters finding it difficult or very difficult to get by on present income amid a nationwide surge in rents.
But the biggest increase in stress over the past year was among people with a mortgage, who have borne the brunt of the fastest interest rate tightening cycle in a generation. About three in 10 borrowers are finding it tough.
None of this should be a surprise to followers of this channel, as I have been reporting the steady rise in cash flow stress in recent times, to new highs. My latest data to end August will be out in the next few days, and the trends continue to deteriorate.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
Listing rise in a number of locations, suggesting potential home price weakness especially in Sydney and Melbourne. So the question is where is the lift coming from, what is driving it, and what are the potential consequences?
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.
Listing rise in a number of locations, suggesting potential home price weakness especially in Sydney and Melbourne. So the question is where is the lift coming from, what is driving it, and what are the potential consequences?
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.
Scotty from Star Trek cries, as the Enterprise shakes and hums, as they try to squeeze more out of the warp core. This to me is a good analogy to what’s happening in the economy, based on the latest data from the ABS.
First, Average weekly ordinary time earnings for full-time adults was $1,838 in May 2023, according to new seasonally adjusted figures released today by the Australian Bureau of Statistics (ABS).
The ABS also said the unemployment rate increased by 0.2 percentage points to 3.7 per cent in July (seasonally adjusted).
Now three points, we know that given the pressures on households many are seeking and able to work more hours, and many via multiple jobs to increase income to cover the rapidly rising costs of living – including of course rental payments or increased mortgage payments.
Second, the rise in the unemployment rate is partially explained by the school holidays which occurred through the sample period.
But third, again we have sampling changes as the ABS roll off old samples, and bring a new one in. And here we see the new sample contains significantly higher unemployment counts sufficient to move the dial.
Thus, there is little here to prove that unemployment is rising so implying the RBA won’t hike. Next month we will likely see things moving around, but the gross growth in hours worked in the real issue – how much further can that be pushed, I suspect we are to return to our Star Trek introduction, pushing the Australian economic engines as far as they can go – until something breaks!
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.
I am here running a project to measure financial stress in the UK, using the same methods as in Australia for the past two decades, and down the track I will be able to report and compare data across the country.
And this is timely, given that Gross domestic output is unlikely to return to its pre-pandemic level before 2024, according to just published forecasts from the London-based National Institute of Economic and Social Research. And worse, the UK is headed for five years of lost economic growth as the government fails in its goal to “level-up” the country’s regions and reduce inequality, an influential think tank says.
While output across the country will be lackluster, NIESR said, some regions will feel a sharper pinch. In London, it expects real wages will grow by up to 7% in the five years from the end of 2019 — but in the West Midlands, home to Britain’s third-largest city Birmingham, NIESR is projecting a 5% drop in inflation-adjusted pay.
The broader economy’s tepid pace of growth is one of the factors feeding a gap between the rich and poor, NIESR said. It predicted little real wage growth for low-income households, which also will have to shoulder higher levels of debt as food, energy and housing costs remain historically high.
By 2024, the UK’s poorest households could be facing a shortfall in their disposable incomes of 17% relative to 2019, compared to 5% for the richest households, the think-tank predicted.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest from the ABS on Living Costs highlights that for most households, real costs of living are rising faster than those represented in the CPI.
In fact, when rising mortgage costs are included (up 91.6%) some households are exposed to cost pressures much higher than represented in the CPI – and these are averages of course.
The latest from the ABS on Living Costs highlights that for most households, real costs of living are rising faster than those represented in the CPI.
In fact, when rising mortgage costs are included (up 91.6%) some households are exposed to cost pressures much higher than represented in the CPI – and these are averages of course.
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.
New research from NAB suggests the average Australian feels only “moderately” stressed about money or making ends meet, but also only “moderately” comfortable they are on top of their finances, could manage a major unexpected expense, and are on track to have enough money for their future financial needs. But averages mask.
They say over 4 in 10 (43%) Australians experienced some form of financial hardship in Q2, and is now up from 29% in early-2022 amid rising inflation and higher interest rates. Money is “very much” a source of stress for 1 in 3 Australians, and 1 in 4 are struggling “very much” to make ends meet.
Financial hardship can happen at any time, and is often the result of sickness, job loss or over-commitment, but rising interest rates and cost of living is now also causing financial distress in more households.
The worsening financial situation reflects a number of factors. First, the roughly one-third of households with a mortgage are obviously being smashed by the RBA’s 4.0% of interest rate hikes, which has lifted variable mortgage repayments by about 50%. The situation facing this cohort will only worsen if the RBA hikes further. There are also around 500,000 fixed rate mortgages that will expire over the second half of this year, which will reset these mortgages from rates of around 2% to variable rates approaching 7%:
Second, the roughly one third of renting households are experiencing explosive rental growth, especially across the major capital cities: Rental inflation will remain turbo-charged given the federal government is running the biggest immigration program in history amid falling housing construction rates:
Finally, overall cost-of-living pressures are impacting all cohorts, driven by the hyperinflation in energy (gas and electricity) prices along east coast Australia.
3 in 10 Australians do “not at all” feel they could manage a major unexpected expense, and 1 in 5 do “not at all” feel on top of their day to day finances, or believe they are on track to have enough money to provide for their financial needs in the future.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
“Hidden” Financial Hardship Is On The Rise! [Podcast]
