Social Trends – Page 16 – Digital Finance Analytics (DFA) Blog

Pop Goes My Budget!

Our latest surveys to the end of February reveals the current state of Household Finances in Australian as measured by cash flow. A record 73.3% of those living in the rental sector are under pressure, while just over half of those with a mortgage are also in net negative cash flow. All up around 48% of households or 4.7 million families are struggling. The causes are clear to see, with costs of living still outstripping real incomes, high mortgage interest rates thanks to RBA monetary policy and rental cost driven sky high. Massive net migration, and bad government housing policies have created this disaster, which will likely be with us for decades. Housing affordability is shot.

So, in today’s show I will walk through the latest findings, ahead of a live show during which we will examine the data at a post code level. That show will be on Tuesday 12th March 2024.

But here we examine how we measure cash flow stress, examine the latest results across mortgage, rental, investor and overall financial stress, and also look at our price scenarios for the months ahead, alongside our estimates of mortgage defaults in the next 12 months.

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Digital Finance Analytics (DFA) Blog

Pop Goes My Budget!

00:00 / 00:30:37

The Aussie Housing Supply Shortfall: With Tarric Brooker

Our latest Friday afternoon chat with journalist Tarric Brooker focussed in the great housing debate, which has become a touchstone for debate in Parliament at the moment.

And using the great charts which Tarric presents we look at the issue from multiple dimensions, as well as a quick look at China’s property sector.

You can find Tarric’s charts here: https://avidcom.substack.com/p/dfa-chart-pack-1st-march-2024

Tarric’s news.com.au article here: https://www.news.com.au/finance/economy/australian-economy/property-investors-are-swallowing-up-even-more-of-the-housing-market/news-story/54a4f06b683cc936ae78f4df7c128fc2

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

The Aussie Housing Supply Shortfall: With Tarric Brooker

00:00 / 01:00:15

Another Confirmation Of More Mortgage Stress!

DFA released its report for January several weeks back, and confirmed a further rise in mortgage stress. In our show on this important issue, we also discussed the different methods used to assess mortgage stress.

Now new research from Roy Morgan confirms our findings. They say their research shows 1,609,000 mortgage holders (31.0%) were ‘At Risk’ of ‘mortgage stress’ in the three months to January 2024. This period included an interest rate increase on Melbourne Cup Day with the RBA raising interest rates by +0.25% to 4.35%.

“The extended pause in official interest rate increases for four months from July – October 2023 reduced the pressure on mortgage holders and allowed growth in several areas of the economy to ‘catch up’ and reduce mortgage stress from the mid-year highs above 1.56 million. However, the interest rate increase in November has added renewed pressure on mortgage holders.

“While all eyes are on the latest inflation figures and their potential influence on future movements in interest rates, the fact remains that the greatest impact on an individual, or household’s, ability to pay their mortgage is not interest rates, it’s if they lose their job or main source of income”.

In a few days I will be releasing my February result for stress, and we expect this to remain in the very high range, as costs of living and mortgage costs continue to rise. We also report rental stress, which is right on the front line with rentals in some cases rising 20% or more.

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.

Digital Finance Analytics (DFA) Blog

Another Confirmation Of More Mortgage Stress!

00:00 / 00:07:33

First Time Buyers Dudded, Again!

CBA recently published research showing that more housing was unaffordable, and that was based on two full incomes going to pay the mortgage. Now another report from Domain and Unloan shows that aspiring house buyers in Sydney are indeed largely priced out from the cheapest segment of the market after interest rates and home prices rose sharply last year.

For now, most aspiring home owners would have to rely on the bank of mum and dad to beef up their deposits, buy an investment property while renting, or consider a “lease to own” model.

Buyers have to look further out towards the city’s outer fringes to afford an entry-level house, or opt for a unit in the city. Unless they get help from the family bank, or buy a really cheap investment property and rent, or live at home. The property market is broken.

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.

Digital Finance Analytics (DFA) Blog

First Time Buyers Dudded, Again!

00:00 / 00:07:40

Tip Of The Asbestos Iceberg: The Nightmare Continues Across NSW

More sites have now been confirmed to have asbestos including transport infrastructure projects, primary and secondary schools, supermarkets and hospitals, according to the EPA, across NSW. The premier, Chris Minns, has said the Environment Protection Authority (EPA) is examining the sites as it undertakes its largest investigation ever.

The agency on Saturday said a public school, park, and two part-built housing estates were tainted, while transport projects, a warehouse and a hospital have also been confirmed as impacted.

The activity underway to tackle exposed sites is a pimple compared with the total load in the community. But of course, agencies do not want to take the lid off that can, so individuals must become asbestos aware, that is the cornerstone of our ongoing campaign over at Asbestos Awareness Australia.

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Digital Finance Analytics (DFA) Blog

Tip Of The Asbestos Iceberg: The Nightmare Continues Across NSW

00:00 / 00:08:51

The Rental Market Is Broken…

In my latest surveys we showed that cash flow stress among households has risen to an all time high of 73.47% or more than 2.27 million households.

Mapping the Market data from CoreLogic shows the high proportion of areas where house rents have risen by 20% or more across Sydney, and Melbourne, those here, some areas especially to the east of the city did not follow suite. House rents in Brisbane showed more diversity, though central Brisbane saw consider considerable hikes. Adelaide and Perth also had many hot spot areas across house rentals, with some areas to the east of both CBD’s reporting slower growth rates over the past year.

That said, Canberra and Hobart bucked the trend with little or no growth – of course there are rents controls in the ACT which helps to moderate rents.

All this means that for many renters the ability to house themselves has become even more expensive, and this of course flows through into the inflation data with all rents – not just new rents running close to 10% annualised. It’s a real mess, and leading to real social consequences.

Then again, there are some winners as according to data from SQM Research residential landlords in some inner-city and middle ring suburbs pocketed up to $56,000 extra rental income in the past 12 months as rents hit record highs across the major capital cities.

A critical factor here is that some landlords, sitting on strong capital gains, are looking to crystalize their paper profits so have listed their rental property for sale, a trend we see most strongly in Melbourne, but it is spreading elsewhere. In addition, higher rents are not enough to cover the increased mortgage costs, even after negative gearing, so the supply of rental property is on the decline at a time when migration continues to run hot.

The Rental Market Is Broken but do those in political circles want to tackle this critical issue? Lip-service apart, I suspect not. So to that extent, Australia in broken too.

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.

Digital Finance Analytics (DFA) Blog

The Rental Market Is Broken...

00:00 / 00:09:07

First Time Buyers Are At The Pinnacle Of The Building Defects Boom!

I have been covering the disgusting story of construction defects across Australia for some time. In January we published a post titled “Wanted: More High-Rise Purchasers Willing To Play Russian Roulette! First Time Buyers are the biggest victims!

And lets be clear, while the problem is Australia-wide, New South Wales does appear to be at the epi-centre thanks to the privatisation of building inspections, the drive for quick construction at low cost, and unprecedented demand to meet supply. And of course recent proposed planning changes means more high-rise more quickly built. The disaster continues.

There are no real guarantees on current new construction, despite recent changes. So my message to first time buyers who are already under the pump financially, is to be very careful. Make sure you do your own due diligence. Caveat Emptor!

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.

Digital Finance Analytics (DFA) Blog

First Time Buyers Are At The Pinnacle Of The Building Defects Boom!

00:00 / 00:06:11

Are The Rats Leaving Sydney’s Sinking Ship?

Sydney is at risk of becoming “the city with no grandchildren”, a senior government official has warned, as high housing costs drive young families to leave.

The state capital is losing twice as many people aged 30 to 40 as it gains, according to a paper by the NSW Productivity Commission.
“If we don’t act, we could become a city with no grandchildren,” the agency’s commissioner Peter Achterstraat said.

The exodus of that group is a problem, according to Mr Achterstraat, because people in that age range are among the most productive in the workforce.

“They’ve generally completed their training, they’ve had 10 or more years’ experience, and the majority are tech savvy,” he said.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

Are The Rats Leaving Sydney’s Sinking Ship?

00:00 / 00:06:12