Pete Wargent blogspot
Thursday 30 June 2022
Job vacancies surge on
Wednesday 29 June 2022
John McCann: This is why land prices have soared
Property Pod
This week on the Pod I chatted to John McCann from PSP Property Group on trends in construction costs, and where there are bottlenecks in land supply.
Tune in here (or click on the image below):
You can tune in at Spotify, Apple podcasts, and so on.
You can also tune in at Youtube here:
House price 10-15pc off highs in Sydney
Tuesday 28 June 2022
What a 3% cash rate could mean for property prices & households
Livewire piece
A few musings of mine at Livewire Markets here (or click on the image below):
Queensland dominates population growth
Saturday 25 June 2022
Will we get another 500k temporary visa holders?
Visas rebound
Every third person I speak to at the moment seems to be jet-setting off to Portugal, or Italy, or Turkey.
I'm just planning a European trip myself, in fact.
Domestically, flight activity has also returned very close to pre-COVID levels.
So in the short term, at least, we should probably expect labour force tightness and capacity constraints to continue.
And on the plus side, this might mean some temporary respite from rental market pressures.
But there are signs that things are starting to revert.
Australia saw its number of temporary visa holders crash by more than ¾ million through the pandemic, from 2.41 million at the end of 2019 to just 1.64 million in Q3 2021.
Plotting the latest available statistics, and we can see that the rebound is now well and truly on.
By May 2022 there had been a rebound in temporary entrant visa holders of more than ¼ million.
International student visa numbers have rebounded strongly, but to date visitor and working holiday visa holder numbers have not (click to expand the image below for the details by category):
Source: Australian Government
It's not quite clear how many temporary visa holders will come back, and how quickly they might do so, but the trend on the chart and the record high number of job vacancies implies anywhere up to an increase of another 600,000 might be on the cards.
The warmer summer months tend to be a strong drawcard for both permanent migrants and temporary visitors alike.
Students tend to disappear overseas over the Xmas break, but these figures suggest that the traditionally busy January to March period could see immense pressure on hotels and short-stay accommodation, as well as the wider residential rental markets.
For context the latest rental vacancy rate was a 16-year low of just 1 per cent in May, which equates to around 36,500 rental vacancies, according to SQM Research.
New arrivals into Australia are overwhelmingly renters initially, previous research has found.
Do what you do best, outsource the rest
Friday 24 June 2022
Inflation expectations falling, falling...
Peak inflation
A huge subject which clearly deserves a far more detailed post and attention than it's going to get on a Friday arvo (especially when I'm heading to Brisvegas for the weekend).
Supply disruptions tend to resolve themselves in time, and having previously soared, many commodity prices are now dropping (iron ore is down 20 per cent, wheat prices are well off the highs, crude oil is now almost in freefall, and so on), while shipping container and ocean freight rates are also now declining, albeit from sky-high levels.
Meanwhile rising interest and mortgage rates are also dampening demand in the U.S. economy.
Inflation hysteria is naturally running rampant in the media, but consumer price inflation is considered to be a lagging indicator, and markets are now looking ahead to the other side.
Indeed, 5-year inflation expectations have declined to just 2.7 per cent in the U.S., which is already lower than where expectations were in the Autumnal months of last year.
In Australia, a good deal of the consumer price inflation has yet to flow through to the official measures, particularly for household energy and power bills, and possibly for rents, which means that the headline rate of inflation won't peak until the last quarter of the year (and therefore won't be reported until early next year).
Your guess is as good as mine, really, but this suggests to me that the cash rate will be heading higher for the remainder of this year, ostensibly to combat the rising official inflation figures, but then flattening out thereafter as consumer sentiment and demand plunges.
In fact, it's implied that the US funds rate could be on its way back down next year, though a lot can change between now and then.
Have a great weekend!
Household wealth peaks at $15 trillion
Thursday 23 June 2022
Bedpan boom
Wednesday 22 June 2022
Land tax reform to drive tilt to medium-density living
We discussed the key impacts here (or click on the image below):
Job ads cresting
How do construction cost increases impact property?
Thursday 16 June 2022
The Big Picture – economic and property trends
Unemployment bottoms out at 3.9pc
Simon Pressley: These are the housing markets with the brightest outlook
Or you can dial in at Youtube here:
Wednesday 15 June 2022
Vacancies fall to a new 16-year low
Consumer confidence back to 1991 levels
RBA interview on ABC
Tuesday 14 June 2022
NSW set to axe stamp duty
We may also see far more 'flipping' of property, especially once renovation costs come back down to earth.
Monday 13 June 2022
Crypto winter
75bps on the table
Thanks for all the emails and DMs about crypto. I recently spoke at at an event in Queensland (mainly real estate) where I was asked dozens of questions about various coins and NFTs, but it's not my thing, so I don't blog anything about it here.
All I could venture at the event was that if I was 25 I'd probably be balls deep in the space, but since I'm 45 with kids and doing OK without it, it's basically not for me.
A significant part of the pitch was crypto was a hedge against irresponsible central banking and money printing, and you can't really argue with that.
However, the US Federal Funds rate going from 0 to 1 per cent has taken the global market cap in the space down from US$3 trillion to US$1 trillion this year.
Fair warning, there's a decent chance of a 75 basis points hike this month, and the Funds rate may reach 3 per cent next year (which is important because risk-free returns are much easier to come by).
Be careful out there.