Temp visas to hit 3 million in December

Visas to hit 3 million

Rental vacancy rates have eased a little over recent months, rising from around 1 per cent to 1.3 per cent at the national level.

I wonder, though, how things will pan out in the December quarter.

As at August there were 2.74 million temporary visa holders in Australia, and a record 2.44 million excluding the 300,000 visitors. 

Student visas rose to a new record high of 679,293.

Total international students hit a new record of close to 1 million this year.

At a ratio of around 1.4 international student enrolments for each temporary visa, this gets us back to the record high of 679,000 student visas. 

Around 175,000 international students are from China, creating a pathway for more Chinese investment in Australia.

In the December quarter visitor visas will likely rise to around 650,000, implying that there will likely be over 3 million temporary visa holders in Australia. 

Of course a lot of that demand will go into hotels and Airbnb properties.

But given there are only around 39,000 rental vacancies at this quieter time of year, things could get very tight again later in the year.

2-Sense: Tectonic plates shifting globally

2-Sense

Some changes in the landscape of late, which Bates and I discussed on the 2-Sense podcast.

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

You can also watch the YouTube 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:

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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

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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 14,500 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 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.

Inflation, at any price

Inflation disappoints

I'm still slightly smarting from an extraordinarily expensive trip to the US, which was periodically peppered with the newsreels announcing the glorious victory over inflation by partisan academic economists.

Of course, while the inflation rate may indeed be lower, price levels for working folks are excruciatingly higher than they were 4 years ago, a point neatly side-stepped by commentators cheering hard for a Harris-Walz election victory. 

In the event, inflation disappointed to the upside in September, rising by more than expected at +0.2 per cent for the month, and +2.4 per cent for the year (albeit this was the lowest annual headline inflation rate since February 2021). 

The US inflation target is lower than that of Australia, at 2 per cent. 

More concerningly, the core inflation figure rose by more than expected at +0.3 per cent, to pick up the pace to +3.3 per cent over the year.

Source: Bureau of Labor Statistics

At least the spike in freight costs has reversed, with prices falling again there.

Rates to fall anyway

Part of the reason that the US consumer economy has continue to rampage along has been the enormous deficits being run on an ongoing basis. 

With a national debt of US$35 trillion and rising fast, and a gross interest bill steepling to US$1 trillion in 2024, interest rates practically have to come down regardless of the inflation rate tracking above inflation.

Markets are pricing for a 25 basis points cut in November, and another 25 basis points cut in December.

Get you hedge in

I think the following point is implicit in a lot of what I've written over the years, but it's worth reiterating anyway.

With developed economies running up such massive government debt balances deflation will be avoided at all costs - even by dropping money from proverbial helicopters if needs be - and you simply must get your inflation hedge in.

A look at the world inflation graph since the US came off the gold standard in 1971, effectively ending the Bretton Woods agreement, underscores the point.

Setting money on fire!

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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 14,500 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 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.

7 useful mental models for property investing

Bonus episode

Cate and I decided to record a bonus episode on our Buy Right property podcast, on the subject of 7 useful mental models for property investing.

I enjoyed this one a lot.

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

You can get a copy of our book here, or at Amazon or in all good bookstores and airport stores (or click on the image below):

State of the Markets live

Livestream chat

Our state of the markets live chats are always very popular. 

I joined Owen Rask for our latest State of the Markets livestream, which you can watch back 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 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 14,500 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 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.

New dwelling starts fall to just 40k

New home starts drop

New dwelling starts fell -1.1 per cent in the June quarter to just 40,293, seasonally adjusted. 

In particular starts for units and apartments were extremely weak, falling to 13,756 to be -12.3 per cent lower over the year, with construction sector insolvencies running at record highs.

The number of new dwellings under construction has been in steady decline for the past two years now.

There were about 88,000 houses under construction as at June 2024, down from around 105,000 at the cycle highs. 

New dwelling approvals in Sydney - especially for new unit projects - are not translating to new project starts, pointing to a chronic undersupply over the next few years as hot immigration combines with a steady return to city office work.

There was a bit of an uplift to completions in the three most populous states, albeit this only lifted total completions to 44,850, a long way short of the desired 60,000 per quarter.

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The Reserve Bank of New Zealand cut the cash rate by 50 basis points from a 15-year high of 5.25 per cent to 4.75 per cent in a bid to stave off messy recessionary conditions:

I don't think Australia is immune to excess capacity, and we won't be too far behind. 

New listings rise in spring selling season

Spring sales time

PropTrack reported new listings up by 10.1 per cent in September, as the spring selling season kicks into gear.

Over the year, listings were up more modestly, by +6.5 per cent.

That said, listings were still lower year-on-year in Perth, Adelaide, Brisbane, and Darwin,

Source: PropTrack

It's good to see a bit more choice out there for buyers.

In saying that, total listings are coming from an extremely low base, and overall quality stock on the market remains tight.

Source: PropTrack

We're seeing a fair amount of properties transacting pre-market and off-market, reflecting the tight nature of market conditions.

You can find PropTrack's media release 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 14,500 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 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.

Costs pressures ease a bit further (NAB Survey)

Inflation pressures are easing

National Australia Bank released the latest NAB Survey, which showed a bit of a (modest) bounce in business confidence and business conditions. 

Cost pressures are still easing, though, which is good to see.

Westpac Economics commented:

"On the costs front, the survey continues to report an easing in input cost pressures. The labour costs index is currently tracking a quarterly equivalent pace of 1.7% (down from 1.8% in August) while the purchase costs index is running at 1.2% (down from 1.6% in August) The pass-through of these costs to consumer prices remain limited, with final product prices tracking a pace of just 0.5% (down from 0.7% in August)".

Forward orders remain very weak, with the index stuck at -5 points.

Consumer sentiment rises to 2½ year high

Interest rate expectations fall

Consumer sentiment rose 6.2 per cent last month, to be 9.5 per cent higher over the year.

Consumers were buoyed by a sharp drop in interest rate expectations.

Source: Westpac

Consumer sentiment is coming off a very low base, but is now at a 2½ year high.

Source: Westpac

House price expectations ticked up, mainly centred around increases for New South Wales and Victoria.

---

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 14,500 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 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.

Munger's mental models #12: Soldiering on!

Munger's mental models

Finally, we've reached the end of this video series.

For the final video tune in here (or click on the image below):

Munger's mental models #11: The bell curve fallacy

Munger's mental models

It's the penultimate video in the series today...tune in here (or click on the image below):

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Melbourne Institute reported an increase of only +0.1 per cent for its inflation gauge in September, after a drop of -0.1 per cent in August.

Over the year, headline inflation remained close to 3-year lows, at 2.6 per cent, well below what the ABS has recently reported.

The pulse for core inflation figure has been very modest over the past 3 months as well.

Justin Fabo of Antipodean Macro Tweeted the below chart showing how on a 3m/3m basis, core inflationary pressures have evaporated (at least, on this gauge). 

Looks OK.

APP: Q&A episode

Q&A

Join Owen and Chris for this week's Q&A episode of the Australian Property Podcast.

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

You can also catch the YouTube version here:

Munger's Mental Models #10: Becoming friends with the eminent dead

Munger's mental models

We're getting close to the end of this 12-video series on Munger's mental models.

Here is number 10 - become friends with the eminent dead - tune in here (or click on the image below):

US unemployment rate falls to 4.1pc!

Soft landing

Been in the US for the past little while - east coast and west coast - and it's been pretty interesting, to say the least.

On the one hand - and this is hardly an original observation - it appears all too easy to fall through the safety net, and the easy access to both legal and illegal drugs evidently isn't helping matters.

On the other hand, while I've largely been in areas populated by many tourists, you'd be hard pressed to conclude anything other than that the consumer economy is still fairly romping along.

A couple of other things of note.

New weight loss drugs have become widely available and are being advertised all over the place, to the extent that for the first time in decades obesity rates are actually in decline, despite the alarming levels of sugar consumption (it's darned hard to avoid consuming the donuts, I must admit).

Also, housing prices remain at record highs...and in Los Angeles are fairly roaring ahead.

Despite all of the monetary tightening, in nominal terms housing and stock markets have seemed almost unbreakable.

The trend for housing prices appears to be similar in Boston on the east coast, and indeed nationally.

My Uber driver told me that residents in LA often don't even look at homes priced below US$700-800k, because they know in advance that won't be liveable. 

Housing that you'd be happily prepared to live in generally seems to be extremely expensive on the west coast (especially when you convert to Aussie dollar terms), leading some prospective homeowners to move to other states further south, such as Texas and Georgia.

Jobs data beats

In that context, the Bureau of Labor Statistics released the latest payrolls figures, which were far stronger than expected, with employment rising +254,000, and revisions to the preceding months adding a further +72,000.

This was far better than median market expectations, and bond yields jumped. 

As with Australia, much of the hiring has been for government and healthcare roles, and in aggregate employment has increased for 45 months consecutively.

The unemployment rate dropped lower at 4.1 per cent, down from 4.3 per cent two months earlier.

Average hourly earnings were also hotter than expected, rising +4 per cent over the year.

Ahead of this report it had been expected that the Federal Reserve would deliver another 50 basis points interest rate cut at the next meeting.

However, these numbers were far better than expected, and expectations have been pared back to a much more likely 25 basis points easing.

Oil prices have also jumped by around +10 per cent from their lows this week on escalation in the Middle East, which will further temper some of the expectations around interest rates.

Housing lending rose 1pc in August

Lending rises

Total housing loans rose 1 per cent in August to $30.4 billion.

Investment lending continued to rise, up 1.4 per cent to $11.7 billion.

Investor lending is up 34 per cent from a year earlier, and isn't too far off previous highs.

Source: ABS

The average loan size increased again, partly because lower income earners are locked out.

First homebuyer numbers remained solid - with deposits ably assisted by the bank of Mum and Dad - but the number of loans to buy newly erected dwellings fell 4.1 per cent. 

"Have banks de-risked too far? Let banks lend"

Research by Jonathan Mott at Barrenjoey shows that there's been a huge lift in the share of loans going to households with a household income of above $200,000, while lower income earners are shut out by the 3 percentage points lending assessment buffer.

In essence, housing credit is becoming the purview of the wealthy, as detailed in a paper submitted by Barrenjoey to the Parliament of Australia. 

One suggestion, from Dr Alex Joiner of IFM Investors among others, has been to reduce the 3 percentage points lending assessment buffer for first homebuyers only, rather than for all borrowers. 

---

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 14,500 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 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.

Fixed rates set to fall

Fixed rate cuts

Escalating tensions in the middle east over the past 24 hours have lit up oil prices a bit...and of course are a major concern in their own right.

Still, Australia's 3-year bond yield has moved considerably lower over recent months.

Not sure too many people will be taking them up just yet, but fixed mortgage rates should be available from below 5½ per cent in due course.

Indeed, cue the following via Macquarie Bank/broker channels this morning, from 5.39 per cent:

There should be plenty more of this to follow over the months ahead.

---

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 14,500 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 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.