Building approvals: mainly softening

Melbourne CBD back to life

My first trip to Melbourne in nearly about 2½ years this week, to present at Pepperstone with former Foreign Minister and NSW Premier Bob Carr, Stephen Koukoulas from Market Economics, and Nadine Blayney from ausbiz TV.

There will be some key grabs out on Youtube in due course, showing our discussions on the Budget, geopolitics, immigration and demographics, and the housing market. 

The obligatory 'night on the town' revealed Melbourne CBD to be gradually getting back to normal, despite many employees since self-isolating due to COVID rules. 

Building approvals bounce

After the Omicron mayhem saw building approvals crunched lower in January, there was the expected bounce in February.

Despite the bounce, the overall trend remains pretty soft around the country as the HomeBuilder stimulus fades into the rear-view mirror. 

The February bounce was overwhelmingly driven by...well, high-rise units (9+ storeys) in Melbourne.

Elsewhere the trend is weakening.

It still appears to me that there will be a chronic supply shortage ahead as travel through the international borders reignites. 

Housing credit impulse fades

Business credit bounce

Credit growth picked up to 7.9 per cent in February, for the fastest annual growth since 2008, largely thanks to a strong acceleration in business credit growth.

Housing credit growth increased a little further over the year, but momentum is now rolling over.

Investor credit growth is gradually starting to pick up, perhaps encouraged by the prospect of rising rents and positive net yields as an inflation hedge. 

Overall, the housing credit impulse is fading now, leading annual house price growth lower. 

Job vacancies keep rising to record high

Vacancies soar

Job vacancies continued to rise in the February quarter, up another 6.9 per cent to a record high of 423,500.

Several Aussie states posted record job vacancy numbers. 

There has been some friction in hiring, partly related to COVID restrictions and mandates, and the reopening of the international borders will help in time.

However, 423,500 represents a massive 3 per cent of the labour force, and implies further declines in the unemployment rate ahead. 

With only 1.33 unemployed persons per job vacancy, pay rises should also lie ahead for employees.

Investment strategies: Dogs of the Dow

Dogs of the Dow

We took a look at another of the popular investment strategies, the famous Dogs of the Dow.

Tune in here (or click on the image below)

You can check out our full series at Apple podcasts, or you can tune in at Soundcloud, Stitcher, or Spotify.

Don't forget to leave us a friendly review, as it helps us to get the word out. 

Regional population growth outpaced capitals in FY21

Rush to the regions

Interesting statistics from the ABS, detailing the rush to the regions.

Regional population growth outpaced capital city population growth in the 2021 financial year for the first time since 1981.

Melbourne's population actually fell by -60,500 as punters looked to escape the heaviest of the lockdown restrictions.

Regional Victoria saw an increase of +15,700, while regional Queensland (+24,000) and regional New South Wales saw strong increases. 

Of the capital cities, Brisbane saw by far the strongest annual population increase at +21,900.

Source: ABS

Growth in the capital cities was stymied by a combination of international border closures and a rush to the regions as buyers undertook a literal 'race for space'.

The largest population decline was in inner Melbourne, which saw a decline of 5,900, although this now appears to have reversed, with inner-city vacancy rates in sharp decline. 

Property Pod: Alan Kohler on the outlook for interest rates...& more

Property Pod

This week on the Property Pod, the legendary Alan Kohler talks about what comes next for interest rates and more.

Tune in here (or click on the image below):

You can also tune in at Youtube here (or below):

You can also tune in at Spotify, Apple podcasts, and wherever else. 

Enjoy!

Property as an inflation hedge

Hedging inflation risks

Some food for thought on the inflation question here (or click on the image below):

Brisbane: impact of the floods

After the floods

SPI take a look at what's going down here (or click on the image below):

Brisbane housing prices have increased 1.7 per cent in March month to date, while Sydney and Melbourne have apparently flattened out, at least for the time being. 

Election season

With an election due by the back end of May, it's time for some policy proposals to be drip-fed out.

Labor's Albanese has proposed to keep negative gearing benefits in place this time around, while announcing a scheme to assist 10,000 regional first homebuyers per year into the market. 

See here for details (or click on the image below):

There will plenty of similar and related discussions over the next couple of months. 

Job ads ascend to a 13-year high

Jobs ads levitate higher

Job advertisements increased by 3.6 per cent (or 9,300 ads) in February to a seasonally adjusted total of 269,700.

This comes off the back of the strong 4.7 per cent seasonally adjusted increase in January. 

Overall, this takes job ads to a level commensurate with a 13-year high on this data series, albeit below the levels we saw in the mining boom as a share of the labour force.

Total advertisements are trending nicely higher across all states and territories, except perhaps the Northern Territory where things appear to be going backwards a little. 

As for the figures compared to pre-COVID levels?

It's interesting how things have played out - the lockdowns stunned the government and central bank into a powerful stimulus, which sees job ads well above where they were at in 2018 and 2019. 

This naturally bodes well for future hiring, and should ultimately push the unemployment rate down to half-century lows of under 4 per cent later in 2022. 

I still wonder where everyone is going to live, as rental vacancies continue to tighten.

Perhaps the answer will make itself clearer over the year ahead, because it isn't to me at the moment. 

It looks like rental vacancy rates will be running at around 20-year lows of about 1 per cent next month. 

Podcast: The Permanent Portfolio

The Permanent Portfolio

An investment strategy worthy of consideration, depending on the stage you're at in your journey.

Tune in here (or click on the image below):

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You can listen to the whole podcast back-series on Apple here.

You can also tune in to the full podcast series at Soundcloud, Stitcher, or Spotify.

You can download our new e-book here.

Don't forget to leave us a friendly review, as it helps us to get the word out.

Pepperstone event, Melbourne

Pepperstone, Melbourne

If you didn't already bag yourself a ticket, details below:

Emergence 2022 in Sydney

Emergence 2022 event

Watch me presenting at Emergence 2022 at Martin Place in Sydney here (from 5:31:30):

I also chatted to the guys at Wholesale Investor here:

Shoot me an email for the slide deck or further details.

This is when the 18-year land cycle will peak

Property Pod

On this week's Property Pod, President of Prosper Australia Catherine Cashmore discusses when the land cycle will peak, and how to profit (or avoid losses) accordingly.

Tune in here (or click on the image below): 

You can also tune in at Apple Podcasts, Spotify, or wherever else you get your podcasting fix. 

And you can also listen on Youtube here: 

Enjoy! 

Interstate migration to QLD balloons to record high

SEQ super-surge

Lockdowns and restrictions in New South Wales and Victoria saw net interstate migration to Queensland balloon to a record high in the third quarter of 2021. 

Even these figures are probably understated given the method of measurement.

The Q3 surge was largely driven by movements from New South Wales. 

Over the year to September Victoria saw a sharp decline in its population, while south-east Queensland surged. 

The 9 months of lockdowns in Victoria made quite a difference to demographic flows, mirroring many similar outcomes in the U.S. Democrat states. 

Economic and property trends: The Big Picture

The Big Picture podcast

I joined Michael Yardney on the Big Picture podcast here (or click on the image below):

4pc unemployment rate equal lowest since 1974

Working nation

Employment jumped 77,400 in February, driven by a huge 121,900 increase in full-time employment.

January's figures were also revised up significantly, taking total employment to a fresh high of 13.372 million.

Full-time employment is now over 9¼ million, by far the highest ever figure. 

New South Wales has added 83,000 to total employment over the past quarter, taking full-time employment in the state to a record high of 4.22 million, with an unemployment rate of just 3.7 per cent.

Expect to see a booming rentals market in Sydney this year. 

The participation rate rose to an all-time high of 66.4 per cent. 

Despite this the unemployment rate fell to 4.04 per cent.

A headline unemployment rate of 4 per cent is the equal lowest level in the 47 years since 1974. 

Hours worked rebounded in February, but still remain below previous highs - about the only weak point in the release. 

The wrap

The data reference period relates to before the recent floods, so hours worked will almost certainly decline in March.

Still a super-strong set of employment figures, and with all and sundry calling for interest rates to be hiked expect to see a chronic shortage of rental properties this year. 

Bookmark this one: I expect rental price growth to accelerate to 20 per cent year-on-year.

Low Rates High Returns podcast: Dreman contrarian strategies

Investment strategies mini-series

Great to be back in the studio at last! 

In this mini-series we discuss some of the most interesting investment strategies.

In particular, the concept of the permanent portfolio is one well worth considering, depending on your stage of the journey, and we discuss that approach later in the series. 

This week we discuss David Dreman's contrarian investment strategies.

Dreman is an undoubted legend, but my personal view is that this approach is not so easy to pull off for the average investor with limited time at their disposal, especially with regards to stock picking.

Take a listen to hear why. 

Tune in here (or click on the image below):

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You can listen to the whole podcast back-series on Apple here.

You can also tune in to the full podcast series at Soundcloud, Stitcher, or Spotify.

You can download our new e-book here.

Don't forget to leave us a friendly review, as it helps us to get the word out.

Run for the hills! Inflation is coming

Property Pod

This week on the Property Pod, Louis Christopher, the founder of SQM Research, says investors need to get their inflation hedge in place.

Don't miss this one!

Tune in here (or click on the image below):

You can also tune in at Apple podcasts, Spotify, and elsewhere! 

Oh, and Youtube! 

Resi prices up 23.7pc last year

Housing boom in 2021

Residential prices rose 23.7 per cent in 2021, with house prices rising at twice the pace of attached dwellings overall. 

All capital city markets saw a strong performance in prices, with Hobart continuing as the top performer since 2003.

Brisbane house prices absolutely ripped last year, recording price growth of over 30 per cent in 2021.

Sydney was also a strong performer over the year. 

Melbourne recorded solid results, despite all of the well-documented disruptions and restrictions. 

The total value of Australia's dwelling stock rose to $9.9 trillion on the preliminary estimates, rising by over $2 trillion across the calendar year. 

Clearly it was a big year across the capital cities, with many regional markets also outperforming.