Weakest retail result in two decades

Retail recession

Pouring cold water on the notion that the economy needs to be cooled further, retail turnover was incredibly weak in the month of March, falling -0.4 per cent in seasonally adjusted terms.

Allowing for issues with seasonality, the year-on-year growth was the slowest in 20 years, despite record high population growth.

The graph shows a fascinating story of lockdowns, reopenings, and spikes in consumer prices!

Source: ABS

Retail figures basically don't get much weaker than that.

Retail turnover is 30 per cent higher than it was 5 years earlier, but the population of Australia has increased by 1.9 million (+7½ per cent) over that time, and of course retail prices took quite a sizeable leap through the pandemic as well. 

I'll let others kick over the entrails there, and instead take a run through the Reserve Bank's credit growth figures from last month's Financial Aggregates, which slowed a little to 0.3 per cent in March (from 0.5 per cent in February). 

Housing credit growth actually picked up a bit over the month from 0.37 per cent to 0.40 per cent. 

The uptick was driven by both owner-occupiers, and this month, investors. 

Over the year, housing credit growth picked up a little to 4.3 per cent. 

The past year has been characterised by stock shortages, pushing housing price growth far ahead of what might've been expected or implied by the credit impulse. 

We thus may well find that the peak for the rate of housing price growth was in the first quarter of 2024, as higher mortgage rates now begin to bite. 

Overall, solid credit growth figures for housing, but incredibly soft retail spending, which will rightly be today's main economic story. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

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Big Picture Podcast: Property shocker

Big Picture Podcast

Some remarkable stats for for you this month on the Big Picture Podcast with Michael Yardney.

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

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P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

1. Boom or Bust – 20 minute online workshop for investors

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You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property investment purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here. 

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

2-Sense: Cranes, cranes, everywhere, but...

2-Sense podcast

Another day, another development firm collapse. 

This time it was Hansen Constructions in Queensland, a large player, and another bellwether for wider industry conditions.

The housing supply shortfall could endure throughout the decade the way things are doing. 

This week on the podcast, Batesy and I discussed where the cranes are, what's happening with office space, and residential property market news.

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

There's also a YouTube version here:

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P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

1. Boom or Bust – 20 minute online workshop for investors

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You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property investment purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here. 

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

BTR comes into sharper focus

Build to Rent push

Budget night is coming up pretty soon, and I expect the Treasurer will come up with some tax incentives to push the Build to Rent residential sector forward. 

Corporate landlords will be incentivised to rent out units to tenants and offer the potential for longer lease terms.

I'm not a fan of the sector myself, but some people like the idea of paying rent to a corporate instead of a private landlord. 

It's a massive part of the new supply in the London housing market these days, and Labor Party in Australia likes the idea, spurred on by union-dominated superannuation funds.

Auckland has been embracing BTR lately, with the Resido development launching this week.

$921 per week for a 2-bedroom flat doesn't sound like much of a housing affordability solution to me, at the best part of 50 grand a year from your post-tax dollars.

In Australia, BTR will mostly be focused on Melbourne, and to some degree Brisbane and Gold Coast.

It's hard to see it taking off so much in Sydney, where land prices are too high, and planning restrictions make life trickier. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

1. Boom or Bust – 20 minute online workshop for investors

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You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property investment purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here. 

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

CBA on the inflation 'shock' and awe

Panic stations!

The good guys CBA produced a neat graph showing the ongoing progress to the inflation target.

Not for the first time, the monthly inflation figure jumped back a little bit, but then again this isn't all that unexpected when you look at how the figures are updated on the monthly prices indicator.

Almost every leading indicator is pointing to weaker labour force figures and weaker ages growth ahead, even if the government is crush-loading the rental market. 

I also wonder a bit if the seasonal adjustments are working quite as well as they used to.

Certainly there have been a few challenges with retail seasonality and the labour force figures, so I wouldn't be all that surprised if inflation in Q2 suddenly drops again, depending on what happens with fuel prices. 

Source: ABS

Overall, I reckon if you'd asked at the end of the "lockdown-and-border-closures" 2022 calendar year, and we could've banked inflation falling from 7.8 per cent to 3.6 per cent over the course of five quarters, policymakers would've been thrilled and bitten your hand off.

The low hanging fruit now having been picked, the final part of the journey may prove to be the trickiest part to navigate. 

Onwards!

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property investment purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here. 

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

ANZAC Day

ANZAC Day

Australia's temporary visas hit a new record high in March of 2.83 million.

Nothing more to add today.

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Lest we forget, today is ANZAC Day.

Asian century gathers pace

Asian Century

Australia's Indian-born population has continued to explode to 846,000 in FY2023, from only 378,000 a decade earlier. 

The Chinese-born population has also increased from 432,000 to 656,000 over the same time period.

The English-born population, on the other hand is falling.

Our parents are getting old, the exchange rate isn't what it used to be, and many Brits came on the promise of buying the Sylvania Waters style McMansion, which isn't as easy as it used to be these days. 

Reported the Australian Bureau of Statistics:

Source: ABS

Thus it won't be long before there are more Indian-born Aussies than of any other nation. 

Source: ABS

The overseas-born population increased by +494,000 over the financial year to 8.2 million.

Source: ABS

At 30.7 per cent, it's highest share of overseas-born Aussies in the 130 years since 1893. 

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In other news the ABS reported that capital cities are now leading rental price growth.

Having fallen in the pandemic 'race for space' the highest rental price growth has been seen in the inner cities as rents have normalised higher. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property investment purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here. 

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Major builder collapses; inflation falls to...3.6pc

Collier Homes collapses

Another major builder collapsed in Australia today.

This time it was Collier Homes, a 60-year old business founded in the 1950s, and another huge scalp for this increasingly devasting market cycle for the sector. 

That's now 2,349 construction and development firms that have collapsed over the past year - some of which were to be expected, of course, especially after the effective moratorium on insolvencies through the pandemic period - but this one was a shock to the sector, being such a large and generally well-managed industry player. 

In other economic news, inflation came in at 1 per cent for the March 2024 quarter, which was a bit higher than market and economist expectations.

Over the year the inflation rate was 3.6 per cent, some way down from 4.1 per cent at the end of December 2023, which is at least heartening, but also a bit above the Reserve Bank's latest SOMP forecasts. 

Interest rates have largely worked as expected on the interest-rate sensitive sectors of the economy - prices actually fell for clothing and footwear, and furnishings and household equipment, for example - however as we'll explore below there are inflationary pressures on some of the non-discretionary items. 

Unfortunately, inflation was higher than expected largely due to sectors which have come under pressure from extremely high population growth.

There were large price increases in secondary education (+6.1 per cent), tertiary education (+6.5 per cent), and medical and hospital services (+2.3 per cent). 

James Foster points out that this quarter saw a 12-year high for education price increases.

Rents also appeared to reaccelerate in the March 2024 quarter, though as Ben Phillips of ANU (and Peter Tulip of the CIS) pointed out to me on the socials there was some distortion in the second half of 2023 due to the Commonwealth Rent Assistance package. 

The brighter news is that PropTrack sees annual rental price growth gradually easing, although there's not too much sign of this yet in SQM Research's asking rent figures...and overall rents are expected to keep rising. 

Over the very long run (i.e. 50 plus years) Sydney seems to have experienced the most constrained market for the supply of rentals and perhaps the highest growth in household wealth, but lately rents have been increasing just about everywhere as record population growth meets 2,350 construction company failures head-on. 

Unfortunately in the short run higher interest rates can do little useful to help with the rental shortage (if anything it might even the opposite in the immediate term), and as I discussed on 2GB last night, the smarter route to a fix here could be to cool the rate of population growth, to the extent that's practicable. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property investment purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here. 

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Budget, and property tax reforms on the cards?

2GB Money News

I joined Scott Hayward (from 4:30) on tonight's Money News to discuss Lambie and Pocock's proposed property tax reforms and more.

Tune in here from (4:30) or click on the image below:

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P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property investment purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here. 

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Wages growth rolling over in the face of record population growth

Labour supply mushrooms

Overall, the jobs market in Australia has held up pretty well...to date.

However, the chronic labour shortages experienced in 2021 and 2022 are now passing as the economy slows and as immigration continues at record highs.

According to Australia's population clock, the estimated resident population on the country has blazed through 27.2 million.

Recall that we only went through the estimated 27 million a few months ago, with the population growing by one extra person every 46 seconds, or 1,878 per day.

Source: ABS

Extrapolating that out points to population growth of around +685,000 per year, which is more than the capacity of the country's housing and infrastructure can deal with.

The government is moving to normalise this figure lower, partly through the rejection of more international student visas. 

In the meantime, wages growth will almost certainly roll over as employers have more choice.

Anecdotally, from people I know in the recruitment sector in Sydney, hiring sentiment has really turned to custard now, and indeed prospective job losses are on the cards for recruiters themselves in this environment. 

In this context, SEEK's Advertised Salary Index increased by +0.2 per cent in March, to be +4.2 per cent higher over the year. 

Source: SEEK

That's the slowest annual pace of growth in 18 months, and the monthly increase points to further declines ahead. 

-

Tomorrow we'll get the latest inflation figures for the March quarter of 2024, which are likely to show a continuation of the ongoing disinflationary trend in Australia.

I'll update all the latest inflation charts then. 

Return to office

JLL's latest figures showed that the first quarter of 2024 was characterised by net absorption of 33,000 square metres of office space (the reverse was true in the last quarter of 2023, when net absorption was -58,700 square metres). 

There's definitely been a flight to quality, and the capital city office vacancy rate remains elevated at 14.7 per cent, but this does provide some reasonably compelling evidence that the sector will ultimately rebalance. 

JLL reported that almost all relocating businesses moved to higher quality office space and locations to capitalise on the weakness in the sector. 

Sydney recorded the strongest net absorption in Q1 2024 at 13,500 square metres, driven by prime grade assets, as capital city businesses pushed their return-to-office rates harder. 

Melbourne has also reported positive absorption and has seen an increase in CBD pedestrian activity in 2024. 

Booming Brisbane recorded positive net absorption for the 8th consecutive quarter. 

Office completions for 2025 and 2026 are expected to be around half of normal levels, which will also assist with the rebalancing across the office sector. 

---

P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:

1. Boom or Bust – 20 minute online workshop for investors

Register for my next free online training - Boom or Bust? How to change your investment plan - book in here

You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.

    2. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property investment purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    3. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.

And our popular Low Rates High Returns Show also remains available on Spotify.

    4. Subscribe for my free daily blog

Subscribe for my free daily blog with over 3.6 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers. 

By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.

My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here. 

5. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.