Investor credit rising for 15 months

Credit growth solid

Housing credit growth was again solid in November, coming at 0.5 per cent for the month, and 5.4 per cent for the year.

Despite higher nominal interest rates, investor credit growth has been picking up for 15 months now.

It was another solid month for credit growth overall, with business credit growth rising to 8½ per cent over the year.

The housing credit impulse is running a bit ahead of capital city housing price growth now.

This can sometimes happen in November when there is a high volume of auction listings.

It will be interesting to see how February kicks off, as there are plenty of willing borrowers with interest rates expected to fall over the next 18 months, but there might not be quite so much stock for sale in the new year.

Source: SQM Research

There's been a bit more stock for sale of late, but the market tends to go to sleep now until the end of January. 

---

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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    2. Download our property buying guide

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Listen in to our podcasts

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You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,800 followers. 

By the way, I'm an 8-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 buy here or on Amazon here - follow our book release on Facebook here and at our Buy Right podcast series here. 

5. Work with me privately

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---

Household wealth increases to $16.6tn

Wealth hits record

In the September 2024 quarter, Aussie household wealth increased for an 8th consecutive period, up by +2.4 per cent or $401 billion, to a record high of $16.9 trillion.

Property prices and superannuation gains drove the gains, while there were also increases in household deposits as the household saving ratio began to edge back up in the second half of 2024. 

Of course, the population has also been increasing rapidly of late.

On a per capita basis, the average figure for household wealth increased to around A$619,000.

Given that there were approximately 11¼ million dwellings in Australia in September, this equates to a remarkable net worth of A$1.5 million per household, on average. 

Whether or not those Aussie dollars will buy you quite so much if travelling internationally next year is an entirely different question, of course. 

NZ malaise

In other news, the Q3 figures for New Zealand's economy were an unmitigated disaster, with real GDP shrinking by -1 per cent, and the figures for Q2 also revised to a -1.1 per cent contraction.

There haven't been numbers anything like as bad as this since the ugly 1991 recession, and the next meeting for the Reserve Bank of New Zealand must feel like an age away, with a further 100 basis points of easing looking likely over the next few meetings. 

A bit of a warning shot for Australia, arguably.

---

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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    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 3¾ million hits here. 

You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,800 followers. 

By the way, I'm an 8-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 buy here or on Amazon here - follow our book 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.

Property Winners, Losers and Predictions for 2025

Big Picture podcast predictions

I joined Michael Yardney to map out property winners, losers, and our predictions for 2025.

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

A few takeaways from the MYEFO splurge (& Buffett's cash pile)

MYEFO malaise

A few quick observations from the mid-year economic outlook released by the Australian Treasury today.

Firstly, economic growth is likely to be lower than was previously projected, with real GDP growth of just 1¾ per cent expected for the fiscal year.

Headline inflation is expected to sit within the target range, with more government subsidies quite likely to be on the way (there was $5½ billion accounted for in the "decisions taken, but not yet announced" big bath, albeit this figure is spread over four years). 

Source: Australian Treasury

Government spending is at near-record levels, so although the unemployment rate is historically low at under 4 per cent, as China's economy slows and commodity prices tumble, there are some thumping projected deficits lying ahead.

These deficits are set to total $144 billion over the course of four years (some $22 billion wider than previously projected in May). 

The budget thus isn't expected to return to balance for a decade.

Dwelling investment has fallen over the 2024 fiscal year, as developer insolvencies continue to climb, and even the rebound in the construction of new housing for 2025/2026 has been revised lower.

The government's Housing Australia Future Fund (HAFF) was due to deliver 30,000 homes over five years, but this has been completely overshadowed by net overseas migration for this year coming in some +80,000 higher the Budget numbers, at +340,000.

Gross debt is expected to rise towards $1 trillion over the course of the year ahead. 

The trajectory for net debt is also a little higher than previously expected.

As a percentage of GDP, Australia hardly has an alarming level of gross debt as compared to many peer countries, but still there's a sense that Australia 'ought' to be faring much better than this given an unemployment rate of just 3.9 per cent and the recent commodities windfall. 

There was little sense from today's release as to whether or not there will be an early election called, but I do expect there could be a few further sweeteners to be announced for households first. 

James Foster ran through the MYEFO figures in more detail here.

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Stocks nosebleed

In other news, stock market valuations have been running at tremendously high levels, with bullish sentiment having reigned supreme in the wake of Trump's victory, especially around tech stocks. 

The Dow Jones industrials index, on the other hand, has fallen more or less continually since December 4. 

While nobody knows what lies ahead, the financial media pages have taken note of Warren Buffett being a net seller of equities over the past two years to build up a record cash pile amounting to an enormous US$325 billion.

That's equivalent to about half of the group's common stocks/cash holdings, although given the Berkshire group's vast size these days closer to around ¼ of the conglomerate's total assets (perhaps a bit higher today). 

With Apple now trading at 41x earnings, Berkshire has sold two-thirds of its stock holdings, in turn incurring a capital gains tax at a rate of 21 per cent. 

Buffett began by buying around US$1 billion of Apple stock at about 10x earnings in 2016, investing US$40 billion in the business in total, but valuations have exploded over the past 8 years leading to the recent sell-down.

Buffett last built up a similarly huge cash pile in 2005, thereafter allowing him to pick up successful investments in Goldman Sachs, Bank of America, and other great businesses at a massive discount. 

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Edit: The Federal Reserve cut interest rates today to 4¼ to 4½ per cent, but will clearly be pausing in January given some relatively solid recent data, leading to a bit of a markets tantrum towards the close. 

Canada has an inflation rate under 2 per cent now as of November, but the US and UK have seen a bit of a bounce of late.

---

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 14,700 followers. 

By the way, I'm an 8-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 buy here or on Amazon here - follow our book 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.

What Will 2025 Bring for Australian Real Estate? Your Big Picture Guide with Pete Wargent

Big Picture Podcast

I joined Michael Yardney on the Big Picture podcast to discuss the 2025 property market outlook.

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

2-Sense: Behind the curve (and the top property trends for 2025)

2-Sense podcast

While the Aussie jobs market keeps on keeping on, this week on the podcast Batesy and I took a look at the countries where things aren't shaping up quite so well.

We also mapped out the top property trends to watch for 2025.

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

You can also watch the video version on YouTube 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 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 14,700 followers. 

By the way, I'm an 8-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 buy here or on Amazon here - follow our book 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.

Apartment construction costs have exploded

Construction costs hurdle jumps

Travelling today, so I'll just drop in a couple of Tweets and a graph from top analyst Cameron Kusher of REA Group.

The average construction cost for apartments in Australia has exploded by an extraordinary +73 per cent since March 2020, according to the latest analysis, to over $600,000 per unit. 

Costs are up for the construction of houses, too, albeit not quite so dramatically.

Given higher mortgage rates, it's not too hard to see why so many developers are sitting it out (the developers that haven't already fallen into insolvency), except for premium-priced apartment projects. 

As Cameron notes, despite the shortage of housing, developers need to see higher prices to make projects feasible. 

Unit prices in some cities - Brisbane, Adelaide, Perth - have already been adjusting upwards over the past few years. 

But in Melbourne and Sydney, established unit prices are not much changed since around 2018.

Victoria is tackling the housing shortage challenge comparatively more successfully than Sydney, with more construction on the city fringe, build to rent projects being approved, and with the stamp duty exemptions fuelling a jump in new apartment sales. 

In Sydney, though, the shortage looks set to become quite dramatic over the next few years, and established units in the supply-constrained markets are faring relatively well.

The Housing Industry Association reported a -10.1 per cent decline in new home sales in November, with new housing supply New South Wales really struggling.

Population growth slows...to +550,000

Population growth normalising

Australia's population growth slowed to +551,200 or +2.1 per cent over the year to June 2024, as net overseas migration eases. 

Although these are still massive numbers over the year, the rate of population growth is a little bit slower than might've been assumed.

In fact, this estimate for resident population will see about -80,000 wiped off the population clock, from 27,530,000 to around 27,450,000 today. 

The rate of net interstate migration to south-east Queensland and Western Australia remains at very high levels, but is possibly just cooling off a little now. 

Patching in net overseas migration and the natural population growth, over the year there was massive population growth into Victoria (+165,100), New South Wales (+143,200), and Queensland (+125,800), while the rate of population growth was still +2.8 per cent in Western Australia. 

Source: ABS

The population clock is now assuming population growth of one additional person every 58 seconds, or approximately +540,000 per annum. 

Looking ahead, expect to see population growth normalising back down to around +400,000 or so per annum. 

Unemployment rate falls to 3.93pc

Unemployment rate drops

It did seem as though November would see a strong month for hiring, and so it proved, with employment rising by +36,000 on a seasonally adjusted basis. 

The 3-month average employment gain held firm at +35,900, with a higher than normal number of people moving from unemployed to start work over the month. 

Still, that's the slowest rate of hiring since June, and December will most likely be softer again. 

Total employment increased to a new high of 14,535,000.

The participation rate fell a bit to 67 per cent, and the unemployed rate dropped all the way back to 3.93 per cent, well below the median market expectation for an increase to 4.2 per cent. 

While this could prove to be a noisy monthly result, it's still a very low number that gives the Reserve Bank of Australia plenty of optionality from here. 

The underemployment rate fell to 6.1 per cent, some 0.6ppts below where it was a year ago, which has been a real surprise throughout calendar year 2024. 

Although hours worked fell in the month, it was still a strong set of numbers, defying the alarming slowdown in the private sector of the economy.

If the unemployment rate can hold at these levels, given that the inflation rate is decelerating, it may prove to be the case that the NAIRU is lower than the previously assumed 4½ per cent.

CBA's Gareth Aird stuck with his February interest rate cut call after the release (not sure about that) on the basis that inflation will come in soft for the December quarter, while Westpac cautioned that the employment figures may have been slightly distorted by seasonality (as they were in 2023). 

Immigration is off the highs..but still high!

Immigration remains high

For a second consecutive month, permanent and long-term arrivals were actually running higher than a year earlier.

Over the year to October 2024, net permanent and long-term immigration was still running at a scorching high of +448,090 (as compared to a similarly wild +440,300 over the year to October 2023).

This was, at least, -10 per cent below the all-time highs recorded in February, earlier this year, but nevertheless high levels of net immigration remain a challenge for the government, given the ongoing housing shortages. 

Short-term arrivals into Australia also continued to recover, although they remain well below pre-pandemic levels for the time being.

Tomorrow, the ABS provides a full update on national and state level population statistics for the quarter to June 2024.

Over the year to March, including natural population growth (births minus deaths), total population growth in Australia was still extremely high at +615,300 or +2.32 per cent.

Population growth was extraordinarily strong in Western Australia (+3.1 per cent), Victoria (+2.7 per cent), and Queensland (+2.5 per cent), while population growth was hardly sluggish in New South Wales at +167,700.

I expect to see population growth over the year to June 2024 to slow a little to around +2.2 per cent.

With around 30 per cent of Aussies born overseas, it won't be long before English born residents drop to below 900,000, to be overtaken in quick time by Indian-born residents, which have recorded electric growth over the past decade. 

Source: ABS

Little wonder, perhaps, that the Australia versus India Boxing Day Test cricket match in Melbourne has seen a record 100,000 or so tickets sell out in such a short time! 

It will also be interesting to get an update on interstate migration, with south-east Queensland having been a major beneficiary of working from home trends and retirement moves over recent years. 

Jobs update due

Also tomorrow morning, we get an important update on the state of the labour market.

After a slow month in October, it seems likely that we'll get a solid rebound for November 2024 for jobs growth, possibly with a surprise temporary upside boost from Black Friday hiring. 

The unemployment rate was 4.1 per cent last month, and it wasn't too far from rounding up to 4.2 per cent.

The median market forecast is for an uptick to 4.2 per cent this month, but underemployment rate measures have remained tight through the calendar year to date.

Looking ahead, most of the leading indicators (including the NAB survey) suggest that the labour market does finally look set to soften from here. 

The latest IVI Index from Jobs & Skills Australia showed online job advertisements falling by -1.9 per cent last month (or 4,200 job ads), and -14.9 per cent over the year (or -37,900 job ads).  

Source: Aus Gov

The biggest falls last month were seen in Victoria (-4.5 per cent, or -2,300 job ads) and Western Australia (-4.7 per cent, or -1,300 job ads), with five of the states/territories recording a monthly decline.

If I was a currency trader - which I'm not - I'd probably position for a surprisingly strong result for jobs growth tomorrow, but then a weaker release for the month of December 2024, when that's reported in a month's time.

Finally, monetary policy is being hotly debated on social media, with market pricing apparently looking for a cash rate target of about 3½ per cent by November 2025...which seems to be the supposed neutral rate, or thereabouts.

Labor-aligned economists have been busy applying enormous pressure on the Reserve Bank of Australia to cut interest rates ahead of next year's election - with the government's popularity and approval rating fading somewhat - and depending on the upcoming data, they might just about get their wishes granted.

---

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 14,700 followers. 

By the way, I'm an 8-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 buy here or on Amazon here - follow our book 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.

February rate cuts hoves into view

Business survey weakens

NAB's Business Survey is one of the best real-time indicators of what's going on in the economy, and the November survey flagged badly across most measures.

The reading for business conditions dropped from 7 to 2 since last month, while the reading for business confidence slumped from 5 in October to a negative reading of -3 for November. 

Source: NAB

Retail price pressures also eased. 

This follows on from a string of weaker than expected economic data, including for GDP growth and wage prices. 

In Canada, the unemployment rate steepled alarmingly to 6.8 per cent last month, as a result of the slowing economy and high population growth.

This sort of spike is what Australia will definitely want to avoid - and to date it has, with the unemployment rate remaining low, largely thanks to a rapid increase in jobs in the public sector, healthcare, and NDIS roles, with government spending measures surging to record highs. 

Rates on hold in December

The Reserve Bank of Australia left the cash rate target on hold in December as expected at 4.35 per cent.

However, the tone of the statement and subsequent media conference was markedly more relaxed about inflationary pressures than before. 

The 3-year government bond yield fell to sit about 13 basis points below where it was yesterday.

After the announcement and media conference today, OIS pricing for the upcoming Reserve Bank meetings has shifted quite markedly. 

A rate cut in February is priced as about a 2 in 3 chance, with a full cut price in by April, and two cuts by May.

This will be welcome news for property market participants, with the prospect of lower mortgage rates likely to provide some support for activity and construction in 2025. 

---

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 14,700 followers. 

By the way, I'm an 8-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 buy here or on Amazon here - follow our book 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.