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. 

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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. 

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

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    2. Download our property buying guide

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New book, behind the scenes

New book & podcast

Catherine adds a few insights into our new book and podcast project here (or click on the image below):

2-Sense podcast: A savage repricing of interest rates

2-Sense podcast

This week on the pod, Batesy and I talked about the latest US data which is spooking the horses a bit, how higher interest rates have impacted Aussie borrowers far more so than in most countries, and wealth property investors returning to the city.

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

You can also watch the video 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

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.

Cranes, cranes, everywhere (Gold Coast boom!)

Cranewatch

Some cracking analysis from RLB in its brilliant crane index for the March quarter of 2024.

869 cranes were on sites nationally, not too far off the previous record high for Australia of 882. 

Source: RLB

The number of residential market cranes fell by 13 over the March quarter, but there have been some offsetting increases, largely due to Amazon's new fulfilment centre construction in Melbourne's Craigieburn

The facility will be Australia's largest at more than 200,000 square metres in size across four levels, and will house more than 25 million of Amazon's sales items from 2025. 

Unsurprisingly, Sydney had the largest number of cranes in the country, but the Gold Coast is a standout, with a record number of cranes on the glitter strip.

Lots of information is pointing towards a cyclical construction boom at the Goldie, including building approvals, off-the-plan sales to downsizers and cash buyers, and a tremendous shift in interstate migration to that part of the country. 

Overall, it looks as though the residential activity is falling away as the pipeline this out, but there's still a vast amount of non-residential construction work underway around the country. 

Source: RLB

You can download RLB's quarterly report here. 

---

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.

Labour market is easing (gradually, then suddenly)

Labour market easing

Everyone was watching closely to see if last month's unemployment rate 'shock' to the downside was an anomaly.

In March, the unemployment rate did increase, but only fairly moderately in the end from 3.71 per cent to 3.84 per cent, on a seasonally adjusted basis. 

Employment fell modestly over the month, down by -6,600, but the total number of employed persons held close to a record high, at above 14¼ million. 

The number of unemployed persons, seasonally adjusted, increased by +20,600, to a still modest 569,900.

Overall, the lower participation rate has stopped unemployment rates from rising further to date.

So far, so unremarkable, but those with their ears to the ground are picking up somewhat different vibes.

Recruitment plans are diving, anecdotally, and the latest figures on company insolvencies - especially in the construction sector, but also now elsewhere - are increasingly worrying. 

Justin Fabo from Antipodean Macro with the chart:

Almost every other indicator is pointing to rising unemployment as well, and Australia will probably follow New Zealand and Canada into an ongoing economic slowdown. 

---

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.

Inflation is sticky around the traps

Higher for longer

Canada's inflation rate edged up from 2.8 per cent to 2.9 per cent in March.

New Zealand saw some ongoing progress, with the inflation rate falling from 4.7 per cent to 4 per cent over the course of the March quarter, though core inflation was a little stickier than hoped for.

The UK's inflation rate fell from 3.4 per cent to 3.2 per cent, which was also a little higher than expected, though it was at least a 2½ year low. 

You could certainly make the argument that over approximately the past 6 months New Zealand and Canada have seen inflation rates running at around the target range (and the same could be said to be true for the US, excluding shelter).

But clearly we aren't quite there yet, and the last leg of the journey back to target might yet prove to be the trickiest.

Australia's quarterly inflation figures are due to be released next week.

Tomorrow will see the release of some very interesting labour force figures Down Under. 

Last month saw an unemployment rate 'shock' to the downside, with the seasonally adjusted 3.7 per cent reported seemingly at odds with most other indicators. 

Perhaps we'll see some of the huge seasonally adjusted increase in jobs unwound this month as well. 

ausbiz TV: Rents stoking the inflationary fire?

ausbiz TV

I joined Juliette Saly at ausbiz TV to discuss the latest property market themes here (or click on the image below):

Immigration accelerating again; but not for long...

Immigration breaks records in early 2024

No respite from the immigration figures in February 2024, with monthly permanent and long-term arrivals surging to a record high at above 153,000.

Over January and February 2024, a record 278,000 permanent and long-term arrivals entered Australia.

In February, long-term departures slumped to just 46,700, so on a net basis we've seen another acceleration in net immigration to just shy of +500,000 over the year, which is of course also a fresh record high. 

There is something of a seasonal aspect to this, and hopefully things should prove to calm down a bit in March.

Indeed, this will partly come about anyway from higher rejection rates for international student visas. 

Education arrivals were more than 101,000 in February as international students came back into the country for the summer term, but this figure will naturally be lower over the following months. 

No peak in sight just yet for immigration, then, but the rapidly rising rejection rates for student visas suggest that the population growth peak probably was hit by around March.

In other news, SQM Research reported rental vacancy rates remaining flat at 1 per cent in March.

Sydney and Melbourne (both at 1.1 per cent respectively) had very tight rental vacancy rates for such large cities, while Perth, Brisbane, and Adelaide all had rental vacancy rates of 1 per cent or lower. 

Asking rents for capital city units continued to rise, rising by +9.2 per cent over the year, despite declines in Hobart.

---

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.