Social Trends – Page 23 – Digital Finance Analytics (DFA) Blog

The Slow Strangle That Higher Rates Causes…

While analysts still talk about the strength of the consumer, if you chose to look below the hood there are real issues emerging, thanks to the higher for longer interest rates that are now in the system because of Central Banks attempts to quell the inflation that they created by their earlier actions.

Jerome Powell conceded this past week that with perfect hindsight, their monetary policy settings through the pandemic would have been tighter – with rates not dropped so low, and quantitative easing less extreme.

My surveys in Australia continue to highlight the pressure on some households with for the first time more than half of mortgage holders underwater from a cashflow perspective. And its not only in Australia.

Americans, for example are falling behind on their auto loans at the highest rate in nearly three decades. With interest rate hikes making newer loans more expensive, millions of car owners are struggling to afford their payments. It’s a clear indication of distress at a time when the economy is sending mixed signals, particularly about the health of consumer spending.

And in the UK the bad news keeps coming for Britain’s lettings market, as a surge in mortgage payments pushes more landlords to the brink and threatens to pile extra misery on tenants.

Landlords paid 40% more mortgage interest in August than the same month a year ago, equating to an extra £4.3 billion ($5.3 billion), according to a report from broker Hamptons International. Mortgaged landlords handed over an average of 37% of their rental income to pay interest in August, up from 28% a year earlier.

“For some investors, this will be unaffordable,” said Aneisha Beveridge, head of research at Hamptons. “They will likely bow out, keeping upward pressure on rents.”

And more broadly, UK banks expect to tighten a squeeze on the mortgage market in the coming months as high interest rates stretch affordability and loan defaults pick up.

The Bank of England’s quarterly credit conditions survey found that lenders decreased the supply of mortgages in the third quarter and will restrict availability further in the coming months. Defaults and losses on home loans picked up in the third quarter as more households are forced to refinance at much higher interest rates.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog

The Slow Strangle That Higher Rates Causes...

00:00 / 00:08:52

The Great Property Paperchase… With Tarric Brooker

Another Friday chat with Tarric Brooker, complete with charts on the housing market. We look at what is really driving the disequilibrium in the sector, and what the consequences are for people trying to access the market.

You can follow the charts here: https://avidcom.substack.com/p/dfa-chart-pack-20th-october-2023

And read Tarric’s article on housing here: https://avidcom.substack.com/p/in-australia-housing-is-the-economy

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog

The Great Property Paperchase... With Tarric Brooker

00:00 / 01:19:29

Pulling Up The Drawbridge On Home Ownership!

One stunning chart which I keep coming back to is the change in income and home prices overtime. It shows simply that housing is becoming more and more unaffordable. We also know that more households have bigger mortgages and so are heavily exposed to higher rates, and that many will still have mortgages well into retirement. Our debt ratios are some of the most extreme across the world, as I have been reporting for years. Great for banks, as they reap interest payments, bad for society. In fact, I believe we are at the point where the drawbridge is being pulled up making it harder than ever to get on to the property ladder or stay there.

Few policies are more harmful to young Australians seeking a place to live than forcing them to compete for housing with hundreds of thousands of new migrants each year.

Future Australians will have to make do with cramped shoebox homes owned by corporations and landlords.

Essentially, the property ownership drawbridge is being progressively raised – but this is by design, not accident. I hope post the voice, Albo and Co will get serious about correcting their mistakes, but frankly I am not holding my breath.

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

Pulling Up The Drawbridge On Home Ownership!

00:00 / 00:09:40

DFA Live Q&A HD Replay: Cameron Murray: Mates, Power, Politics & Economics

This is an edited version of a live discussion with Cameron who republished 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 housing policy and economics in general.

Dr Cameron K. Murray was 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. He is now an independent economist.

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

Digital Finance Analytics (DFA) Blog

DFA Live Q&A HD Replay: Cameron Murray: Mates, Power, Politics & Economics

00:00 / 01:29:11

Its Edwin’s Monday Evening Property Rant!

The latest edition with our property insider Edwin Almeida. We look at the latest “plans” to boost housing, celebrate a 60th anniversary, dissect the latest numbers, and explore why investor property is not working for so many investors as they chose to sell.

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.

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.

Digital Finance Analytics (DFA) Blog

Its Edwin's Monday Evening Property Rant!

00:00 / 01:10:09

Property Investors Are Quitting Like Lemmings!

In my stress surveys I have been calling out the pressures on renters and property investors, especially in the Centre of Melbourne and other inner-city areas across the country. The math is obvious. Despite rental increases, there is a limit on how much property investors can lift them, as renters are under pressure already. And property investors are also faced with significantly higher interest charges and other costs, to the point that the proportion of investors making cash flow positive returns has dropped to an all time low. Given that capital appreciation, the only other growth lever, is at best anemic, and in some cases non-existent, and the fact that you can now get 5 per cent of more on other investments, including term deposits and bonds, investors are continuing to bail. Inner City apartments are on the front line, as listings grow.

The AFR picked this topic up in an recent article, saying low capital gains and the large increase in holding costs are prompting more residential property investors to bail out of inner Melbourne and Sydney markets, data from CoreLogic shows.

The portion of investor-owned listings has ballooned to 60 per cent across Melbourne city over the three months to the September quarter, up from 56.7 per cent from the previous quarter and a sharp jump from the 50.9 per cent share a year ago.

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

Property Investors Are Quitting Like Lemmings!

00:00 / 00:09:48

More First Home Buyers Tap The Government To Enter The Property Market…

Growing difficulty entering the housing market has led to the most first home buyers tapping into the federal government’s Home Guarantee Scheme since its inception four years ago, according to the National Housing Finance and Investment Corporation.

The scheme, which offers three types of guarantees, allows first home buyers to purchase a home with a minimum deposit of 5 per cent to avoid paying mortgage lenders’ insurance. The remaining amount for a 20 per cent deposit – which is required to be exempt from paying the insurance – is guaranteed by the federal government.

The number of first home buyers who used the scheme increased to 45,000 for the 2023 financial year, according to the NFHIC’s fourth annual trend and insights report.

The increase meant almost one in three first home buyers needed access to the scheme to enter the housing market, which is an increase from one in seven in the year prior.

Arrears under the scheme meanwhile have remained at less than 0.1 per cent, which is less than the market average for high LVR (loan-to-value ratio) lending. But the growing cost of living meant the scheme’s arrears were expected to rise in line with the broader home loan market, NHFIC warned.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog

More First Home Buyers Tap The Government To Enter The Property Market...

00:00 / 00:06:49