Podcast mini-series: How to build a powerhouse property portfolio (Episode 10)

Monthly inflation

After a quiet start to the week, Wednesday morning will see the release of the latest monthly inflation data in Australia. 

The monthly inflation figures don't cover the full basket of goods and services, but serve as a handy indicator for where quarterly inflation might be heading.

Inflation is set to be negative in May, however a significant -0.4 per cent drop in May 2023 is also due to drop off the annual figures, meaning that over the year inflation will likely tick up to 3.8 per cent.

Partly thanks to a range of cost of living and energy subsidies as well as lower fuel prices, headline inflation is likely to under 3 per cent later in 2024, though there's a decent chance we end of going back above 3 per cent next year as the subsidies roll off again. 

Buy Right Book

In Episode 10 of our podcast mini-series, Cate and I discussed how to build a powerhouse property portfolio.

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

Don't forget to buy your copy of our new book here or here, or in any good bookstore or airport store, and send us your pics when you have a copy in you hands. 

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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 well over 50,000 audio downloads per month, and growing fast.

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 some 3.7 million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,200 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 - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series 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 podcast: Should government act as referee, or as active player?

2-Sense podcast

We had well over 50,000 audio downloads on the Australian Property Podcast last month - thanks so much for joining along. 

Chris is back from his travels to Bali, and this week on the podcast we discussed all the recent government announcements as they relate to property markets, and much more besides.

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

You can also watch on YouTube 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

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 well over 50,000 audio downloads 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 well 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 14,200 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 - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series 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.

Lending remains tight; rental crisis to continue

Lending remains tight

Borrowers have been walloped by the ongoing increase in mortgage rates.

Although it seems that interest payments have only increased to a manageable level, this doesn't reveal the full picture. 

Less than a decade ago, almost 40 per cent of mortgages by value were on interest-only terms.

In the first quarter of 2024, the share of loans on interest-only terms fell to another record low of just 11 per cent, as the squeeze continues. 

After accounting for principal repayments therefore, mortgage repayments have steepled higher, and mortgage arrears are rising quite quickly now, up to 1.6 per cent for 30+ day mortgage arrears by the first quarter of 2024, with more to come as mortgages continue to reset to higher rates. 

The regulator APRA monitors various forms of 'riskier' lending, all of which are at now tracking at considerably lower levels than they've been historically. 

While other countries are now seeing incomes running at a much higher annual rate than inflation, Australia stayed locked down for longer and we aren't there yet.

Structural budget deficits both at the Federal and State level in Australia haven't helped with the inflation battle, it must be said. 

Eventually disposable incomes will begin to rise, as inflation falls back to below 3 per cent at the end of 2024. 

Even still, debt to disposable income ratio has fallen back to 1.85x, and has been easing over recent quarters. 

Borrowers are still being stress-tested with a 3 percentage points lending assessment buffer, even though financial markets are pricing for lower interest rates through the course of 2025. 

In the meantime, housing starts are unlikely to keep pace with population growth, and thus the rental crisis remains far from resolved. 

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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 14,000 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 - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series 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.

New home sales revert lower (HIA)

New home sales declined in May

New home sales fell -12.6 per cent in May, the preceding month having experienced a pull-forward due to forthcoming regulatory changes. 

Source: HIA

The Housing Industry Association noted how rising costs and high interest rates continue to hold down new housing supply.

Barriers to housing supply were discussed in their media release here.

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The Reserve Bank of Australia kept interest rates on hold today as expected at 4.35 per cent.

The hawkish media discussion probably won't do much for confidence in the struggling homebuilding sector. 

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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 14,000 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 - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series 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.

A time to sell? (Podcast)

API Podcast

Cate and I joined Aaron-Christie David on the Australian Property Investment podcast to discuss if and when there's a time to sell property investments.

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

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ANZ released it job advertisements index, which showed ads continuing to fall, to be down -8.2 per cent from a year earlier.

Source: ANZ Indeed

The index has declined -24 per cent from the November 2022 peaks, and points to rising unemployment ahead.

ASIC's latest data also show insolvencies continuing to rise:

Source: ASIC, Shane Oliver, AMP

There are more construction sector insolvencies on the way, a surge of constructions sector of sole traders reportedly on the brink of mortgage default, according to Equifax. 

New Zealand's economy, meanwhile, is imploding, pointing to imminent rate cuts. 

Overall, it looks like monetary policy is doings it job, if not a little too well. 

Australia's Reserve Bank is set to keep interest rates on hold tomorrow, with a couple of interest rate cuts priced in by futures markets in 2025. 

Buy Right Investing: Episode 9 - Bidding and negotiating

Buy Right podcast

In Episode 9 of our podcast series, Cate and I discussed bidding and negotiating.

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

You can buy our book at Amazon, Dymocks, from our publisher Major Street, at airport stores, and all other good bookshops! 

You can join our free Facebook group here for upcoming offers, and follow along at our website here:

2-Sense: Cameron Kusher from REA Group on the housing cycle

2-Sense

Excited to welcome Cameron Kusher, Director or Economic Research at REA Group - back onto the show to talk housing supply and the market cycle.

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

You can find the podcast at all the usual hosting places.

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If you want to join my free webinar next week on Friday June 21 at 7pm send an email with "Yes" in the title to petewargent@gmail.com and we'll shoot an invite over. 

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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 14,000 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 - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series 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.

Homebuilders walloped again

Prices and pressures

Completing a trifecta of softer price data from the US this week, both import prices (-0.4 per cent) and export prices (-0.6 per cent) declined in May, partly due to lower fuel prices, keeping the annual increase in the import price index low at 1.1 per cent. 

Source: BLS

Even with some very solid employment figures Down Under this week, Australia's 3-year bond yield declined to 3.82 per cent, as low as we've seen since 10 April. 

Despite this, cost pressures in Australia have not declined everywhere.

The below chart from CBA and Macrobond shows what's happened to output prices for residential construction costs since 2020, and it's not good. 

The increase has arguably been more severe for medium-density projects, with costs reportedly up by more than 50 per cent. 

The latest ASIC figures showed a decade-high of 2,643 construction company insolvencies over the past year, with more inevitably in the post. 

Source: ASIC

This week, Fairfax reported a coming 65 per cent increase in insurance costs for new homebuilders in Victoria, effectively doubling the premiums to be charged in the space two years. 

The Teals unsurprisingly (albeit incorrectly) blamed the increase on climate change, while the Greens are calling for a range of wild changes to housing market policies, none of which are going to do anything helpful for new housing supply.

It increasingly feels like 2024 and 2025 will be very disappointing years for construction and housing supply, with rising unit prices eventually driving a supply response in 2026 and 2027. 

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If you want to join my free webinar next week on Friday June 21 at 7pm send an email with "Yes" in the title to petewargent@gmail.com and we'll shoot an invite over. 

---

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 14,000 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 - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series 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.

Unemployment rate eases to 4pc

Labour market clings on

There was a huge range of forecasts for the wildly volatile employment figures in Australia yesterday, with gains expected to be anywhere from an unlikely negative reading to +107,000.

In the event the increase was a bit better than the market median forecast, with employment growth +39,500 to a record high 14,355,100 employed persons in May. 

The numbers have been bouncing around a bit, and the 3-month average gain fell sharply from +51,000 to +24,000, which does suggest gradually loosening labour market conditions.

This was enough to hold the unemployment rate down at 4 per cent.

Generally, the labour market has been loosening, with the trend in underemployment and underutilisation rate rising of late, and wages growth now easing. 

Job advertisements indices have also slowly been coming back down to earth through the course of the year to date.

Hours worked fell -0.5 per cent for the month of May, following on from a -0.2 per cent decline in April, perhaps hinting at a slightly weaker report than implied by the headline jobs numbers (the ABS reported that more workers were calling in sick last month). 

Overall, this was a pretty good result, with fears of a spike in unemployment not yet coming to pass. 

In the US, the Bureau of Labor Statistics reported that producer prices for final demand outright declined in May (-0.2 per cent), with prices for final demand goods down -0.8 per cent, taking bond yields down a little further as the 'immaculate disinflation' narrative gains a bit of ground. 

James Foster ran through the key details of the jobs figures here. 

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If you want to join my free webinar next week on Friday June 21 at 7pm send an email with "Yes" in the title to petewargent@gmail.com and we'll shoot an invite over. 

---

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 14,000 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 - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series 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.

Record population growth in 2023 (continues in H1 2024)

Population boom

The ABS released its latest population figures up to the end of 2023, which just hinted at a possible peak in the growth rate for the estimated resident Aussie population.

Over the course of 2023 the population increased by a record +651,200 (or +2.5 per cent).

Source: ABS

Some of the fastest population growth in the country has been seen in south-east Queensland, and especially Western Australia, where the population has surged by a massive +3.3 per cent in one year.

Tasmania recorded the slowest population growth, its affordability advantage having been eroded by the preceding housing boom.

Over the year, Victoria (+186,500) and New South Wales (+185,500) recorded the largest absolute increase in population, followed by Queensland at +141,400.

Source: ABS

The population clock was just reset slightly lower from around 27.3 million to 27,269,000, as I write this. 

The assumed population growth rate of one additional person every 47 seconds still prices in population growth of  (well) above +650,000 for 2024, however.  

Source: ABS

Gradually year-on-year population growth should slow as the government aims to disrupt the pace of student visa issuance. 

Unfortunately, there's little chance of a pick-up in the speed of homebuilding in the imminent future.

The Age reported that new home builders in Victoria will see a +65 per cent increase in insurances to cover the costs of major developer collapses, following on from a +43 per cent increase a year earlier. 

Meanwhile, Victoria's green lobby seem to be hell-bent on pushing through some extraordinary proposals to stymy investor activity, which will, I fear, end in a disastrous outcome for Melbourne's renters. 

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If you want to join my Free Webinar next week on Friday June 21 at 7pm send an email with "Yes" in the title to petewargent@gmail.com and we'll shoot the details over. 

---

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 14,000 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 - follow our book release and forthcoming release on Facebook here and at our Buy Right podcast series 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.