Buffett Indicator reaches record 238%

Buffett Indicator

The Buffett Indicator is a broad valuation method used for the US stock market, calculated by dividing the total market capitalisation of publicly traded stocks over GDP, expressed as a percentage.

For example, if the total market cap of stocks was double the annual GDP of the US economy, the Buffett Indicator would be said to be 200 per cent.

As noted at 'Longtermtrends.com', Warren Buffett popularised the measure in 2001 by describing it in Fortune magazine as the single best measure of valuation for any given point in time, effectively calculating a sort of 'price to sales' ratio by comparing the market cap of stocks to annual economic output. 

100 per cent was previously considered to be something of a balanced market valuation, and 120 per cent a significant overvaluation.

This week the Wiltshire 5000 to GDP proxy indicator hit an unprecedented 238 per cent, so I'm not quite sure what you'd call that.

Source: longtermtrends.com

You could variously make a case for the impacts of low interest rates, technology and AI efficiencies, and changing trends in corporate profitability.

But still it'd be a case of 'no crying in the casino' if valuations fell 10-20 per cent from here. 

Look at some of what's been going on in recent days.

We now appear to be headed for no fewer than three US$1 trillion plus IPOs (SpaceX, which reportedly could float at a valuation of anywhere up to $2 trillion, ChatGPT, and Anthropic). 

At the first signs of stock market volatility the President posited that the US government could be looking to take a stake in AI companies, further fuelling the remarkable short-term bullish vibes.

Government involvement could be seen as a typical cyclical top signal of extreme late-cycle euphoria, but who knows?

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Next move in rates is down (NAB)

Biz survey pressures ease

NAB's business survey showed business confidence still mired in hugely negative territory at an improving reading of -14, with business conditions steady at +3.

Interestingly, and perhaps a bit surprisingly, cost pressures eased quite significantly in May, following the spike in April related to the Iranian conflict.

Although cost pressures do remain elevated, maybe this represents some early signs of demand destruction.

Source: NAB

Margin pressures are persisting for businesses, while the ongoing downtrend in capacity utilisation points to an ensuing slowdown in economic growth in the second half of 2026.

Both NAB and the the Commonwealth Bank of Australia now see the next move in interest rates as being down, although the timing is uncertain.

Dwelling values rise towards $13 trillion

Before the Budget, the total value of Australia's dwelling stock rose by 2½ per cent or $316 billion in the March 2026 quarter to a total value of $12.8 trillion.

Source: ABS

Western Australia saw its median dwelling price increase by 25 per cent over the year to March 2026, with Queensland's median dwelling price also up by 17 per cent.

Source: ABS

Since values last fell in September 2022, the total value of housing stock has increased by $3 trillion.

You can read the ABS report here.

Of course, this is somewhat old news given that Sydney and Melbourne have been in a downturn for some time now, and because it's been also a month since the Federal Budget was handed down, with its significant proposed changes to tax legislation.

Asking prices for houses nationally are now down -0.7 per cent over the past quarter according to SQM Research's indices (for units asking prices have continued to rise for now, up by 0.7 per cent over the month, and 1.8 per cent over the quarter).

Source: SQM Research

For Sydney, asking prices for houses are down -2.9 per cent over the quarter, while houses in Brisbane (-2.8 per cent) and Melbourne (-2 per cent) are displaying a similar downtrend. 

Source: SQM Research

Shane Oliver of AMP calculated that rental yields would quickly reset higher - rather than the market seeing a protracted or drawn-out downturn - with prices projected to fall -5 per cent overall while rents rise, and on this evidence he may well be right. 

Treasury had previously predicted that the tax changes would see housing price growth as -2 per cent lower than would otherwise had been the case over two years, albeit it's arguably doubtful that anyone truly believed in such a benign calculation. 

Macquarie Bank also projects housing turnover to fall by -20 per cent, with nominal housing prices to fall by -5 per cent in this cycle. 

It seems to be occurring pretty quickly according to these figures.

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

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

    2. 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 50,000 audio downloads per month, and growing fast.

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

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 18k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. 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: Buyer's agent business model sideswiped

Property Podcast

Here's what we discussed:

In this 2 Sense episode of the Australian Property Podcast, Pete Wargent and Chris Bates unpack what the post-Budget property reset is starting to look like in real time. The initial panic has eased, but the aftershocks are now showing up in buyer behaviour, lending conversations and market turnover.

Pete and Chris explain why first-home buyers are suddenly seeing less competition at open homes, why established-property investors are retreating, and why Sydney and Melbourne are leading the slowdown. They also dig into the pressure points underneath the headlines: softer sales volumes, weaker auction conditions, tighter serviceability, and the risk that lower turnover makes housing even less flexible for households and state budgets alike.

A big focus in this episode is the mismatch between policy intent and what may happen on the ground. New-build and off-the-plan inquiries have jumped, but that does not mean projects will stack up or convert into real sales. Pete and Chris talk through why build costs, borrowing limits, settlement risk and buyer caution still matter, and why some ‘solutions’ may look better on paper than in practice.

They also cover rents, vacancies, buyer’s agents under pressure, the markets most exposed if investor demand keeps fading, and what listeners should watch next if they want to buy, hold or rethink a property plan. If you want a calm, practical read on where the market may be heading from here, this is a timely listen.

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

You can also tune in on YouTube here:

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1. Download our property buying guide

Download our free property buying guide here. 

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

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

    2. 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 50,000 audio downloads per month, and growing fast.

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

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. 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.

Credit growth 8pc over the year to April

Housing impulse beyond peak

Credit growth in the Aussie economy was 0.66 per cent in April, down slightly from 0.73 per cent in March, but still up 8 per cent over the year, according to the RBA's Financial Aggregates. 

The Reserve Bank's Sarah Hunter noted today that it's expected that the economy will now go into something of a downturn (this appears highly likely given the Budget tax grab combined with several interest rate hikes).

Housing credit growth was steady in April at 0.64 per cent, to be 7½ per cent higher over the year.

It was another strong month for investor credit growth at 0.93 per cent, leading to double-digit growth for investment over the year to April.

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The housing credit impulse was thus steady in April, but was also below the peak of December 2025.

The wrap

Overall, housing price growth will clearly slow over the year ahead as interest rate hikes and tax changes bite.

You can clearly see the appetite for property investment in these charts given high population growth, low unemployment, and record low rental vacancy rates.

However, the changes to capital gains tax and especially negative gearing legislation is leading to a seismic shift in approach for investors, who are tilting towards new builds, higher-yielding residential or commercial properties, and self-managed super fund property investment...or simply focussing more on building equity through their principal place of residence, which remains capital gains tax free.

---

1. Download our property buying guide

Download our free property buying guide here. 

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

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

    2. 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 50,000 audio downloads per month, and growing fast.

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

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. 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.

GDP per capita slumps

Economy stalls

GDP growth slowed to just 0.3 per cent seasonally adjusted in the March 2026 quarter, and 2½ per cent over the year.

There was some Cyclone disruption to coal and ore exports, which didn't help the slightly glum overall picture. 

The economy has added 1 million additional people over the past two years, though, and after accounting for population growth GDP per capita was negative, and remains below previous highs.

Indeed, per capita GDP was actually higher 15 quarters earlier, in June 2022. 

The household saving ratio is now pulling back again as mortgage repayments rise in 2026. 

For now at least, Australia's terms of trade remain way above their long-run averages, though there is obviously some downside risk here. 

Domestic demand appeared solid enough in the March quarter (though the jump was partly due to the ending of electricity rebates leading to more spending in this area).

However, the economy is likely to be in something of a rut through this calendar year as households will need to absorb the three recent interest rate hikes already delivered, and perhaps more yet besides. 

As previously noted last week, the one bright spot related to data centres in New South Wales and Victoria, with machinery and equipment investment seeing the biggest surge in 30 years.

The wrap

Overall, this was a sluggish result, which might've even been in outright recession territory were it not for the timely boost in investment in data centres, processors, servers, and IT equipment in Sydney and Melbourne.

Looking ahead the series of interest rate hikes will likely weigh further on consumption and housing construction.

James Foster ran through the figures in more detail here. 

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Asking rents rose 1.2 per cent in the capital cities over the past month, to be 7.6 per cent higher over the year.

Unit asking rents rose 0.4 per cent over the month, to be 6.6 per cent higher over the year, according to SQM Research's figures:

Source: SQM Research

Just anecdotally, we've had a couple of Brisbane clients rent out properties at the first busy open homes at rents up to $100/week above where we'd appraised the market to be...though I reckon this dynamic may apply to well-located family homes, but probably less so for generic units. 

---

1. Download our property buying guide

Download our free property buying guide here. 

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

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

    2. 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 50,000 audio downloads per month, and growing fast.

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

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. 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.

ausbiz: Is the housing boom over?

ausbiz TV

I joined Andrew G at ausbiz TV to discuss all the latest property trends.

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

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1. Download our property buying guide

Download our free property buying guide here. 

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

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

    2. 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 50,000 audio downloads per month, and growing fast.

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

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. 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.

Aussie population passes 28 million

28 million resident population

In recent hours, Australia's estimated resident population passed 28 million, according to the ABS Population Clock. 

Under current assumptions, annual population growth is still running at around 448,000 per annum.

Building approvals slow

Building approvals fell a a further -3.4 per cent in April, to a seasonally adjusted 16,700.

House approvals in New South Wales fell -14 per cent, largely accounting for the monthly drop, but this was coming off the back of a strong prior month.

Overall, trends in home approvals look fairly steady.

Unit approvals in the capital cities also remain steady, if pretty unspectacular. 

Much of the strength in attached dwelling approvals in this cycle has been in coastal and regional markets, which now look to be rolling over, in particular for the high-rise sector.

Overall, approximately 200,000 dwellings were approved over the year to April. 

While this is a stronger annual result, it does look as though the recent strength in dwelling approvals has now reached a turning point.

The market now has to absorb three 25 basis points interest rate hikes, a very challenging Federal Budget, and scary headlines to boot, with unit approvals now appearing to trend lower. 

Finally, over the past 22 months, approvals have consistently been running at about 80 per cent of the government's implied target of 20,000 per month.

Weighing all this up, it looks likely that the housing shortage challenges will remain for longer as higher interest rates weigh on the market for new housing, and population growth continues at elevated levels.

James Foster ran through the dwelling approvals figures in more detail here. 

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GDP to soften

With Australia recording its first trade deficit since 2017, weaker net trade will subtract -0.8 percentage points from GDP in the March quarter, with market forecasts being revised down to around 0.3 per cent for real GDP growth in Q1. 

The Fair Work Commission announced a 4.75 per cent increase in the minimum wage for nearly 3 million award wage earners, keeping real wages in positive territory, but in so doing adding to the case for one more interest rate hike. 

---

1. Download our property buying guide

Download our free property buying guide here. 

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

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

    2. 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 50,000 audio downloads per month, and growing fast.

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

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. 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.

Sydney & Melbourne downturn entrenched

Housing flatline in May

Housing prices were down in Sydney and Melbourne in May - and Canberra - while growth rates are turning lower in the other capital cities. 

From Cotality's monthly report:

Source: Cotality

Housing market turnover is well down in Sydney and Melbourne, but regional Australia markets have held up better to date.

Over the past quarter, houses prices in Sydney and Melbourne are down by -2.6 per cent and -2.8 per cent respectively, while units in Sydney and Melbourne are down by a more modest -0.9 per cent and -1.1 per cent respectively:

A very interesting quote from Tim Lawless on the divergence in market conditions over recent years:

“We are continuing to see multi-speed conditions across Australia’s housing sector, with Perth and Melbourne at opposite ends of the spectrum. The past five years have seen these cities diverge sharply, with Perth values up a stunning 91.4% while Melbourne home values are only 3.3% higher since May 2021.”

Generally lower priced properties have been more resilient, according to Cotality, but prices are now even declining in the bottom price quartile for houses in Sydney and Melbourne, and for units in Canberra.

Rents rose by +5.9 per cent over the year to May for the fastest pace of growth since September 2024, while rental vacancy rates fell back to record lows. 

Cotality noted that upwards pressure on rents is likely to persist:

Source: Cotality

You can download Cotality's monthly report here. 

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Records...made to be broken

After nine stonking weeks of gains, the US S&P 500 has bounded 20 per cent higher and blazed to new highs, with the CAPE ratio now approaching the unprecedented high of 44.19, reached in December 1999.

Much of the recent euphoria has been around the huge take-up in AI installations.

The price-to-sales ratio of the US stock market is also at extremely high levels. 

Markets have well and truly moved on from the Iranian conflict (and then some). 

---

1. Download our property buying guide

Download our free property buying guide here. 

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

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

    2. 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 50,000 audio downloads per month, and growing fast.

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

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. 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.