Building approvals at 25-month high

Unit approvals pick up

Building approvals picked up to a seasonally adjusted 16,579 in January, driven by a bump in high-rise and higher-density approvals in Greater Sydney and Greater Melbourne.

House approvals were fairly flat for the month at a seasonally adjusted 9,000, but were 8 per cent higher than a year earlier, mainly thanks to Perth, Adelaide, Melbourne, and Brisbane. 

This was a better result, for sure, but before cracking the champagne it's worth noting that only 107,000 dwellings have been approved across the financial year to date, about 23 per cent below the 140,000 or so needed to meet the stated targets of the Housing Accord. 

One of the limitations of the ABS 'trend' series is that it can miss turning points, and although the trend for building approvals moved lower across recent months, it seems highly likely to me that the 2025 calendar year will be stronger for approvals than 2024 was.

Annual dwelling approvals have picked up from a cycle nadir of 164,000 to 175,000 over the past seven months of data, underscoring the point. 

Overall, this was a better result, suggesting that developers anticipate a more favourable environment ahead for getting new projects sold at the right price, to be built and then delivered to the market.

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    3. Subscribe for my free daily blog

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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. 

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Aussie National Accounts...Chartfest!

Private demand emerges

Real GDP growth came in at a slightly underwhelming 0.6 per cent for the December quarter, with a little boost from net exports and some more growth in government spending. 

The Aussie economy grew by a pretty sluggish 1.3 per cent over the year, and productivity took a disappointing downturn in today's figures.

Public investment rose 1.8 per cent in the December quarter, and this quarter private demand finally did contribute to growth, rising by 0.4 per cent.

Public spending now represents a record share of GDP, according to Westpac's analysis. 

You only have to look at the change in employment by occupation over the past 5 years to see where much of the economic growth has been coming from (healthcare, social assistance, and the rapidly burgeoning NDIS government disability scheme):

Having previously declined for seven consecutive quarters, GDP per capita gratefully eked out a seasonally adjusted increase of 0.1 per cent. 

Although this figure may be revised down later, it does at first blush appear to be the end of the per capita recession, albeit GDP per capita remains 1½ per cent below its highs. 

Nominal GDP (i.e. in current prices) increased by 1.6 per cent to a new record high, with export prices getting a boost in the December quarter. 

After an unusual few years to say the least, it seems that other income measures in the economy have broadly been flat over the past 18 months. 

Australia's terms of trade got a little fillip in the December quarter, with the lower Aussie dollar helping to lift export prices for iron ore, LNG, and rural goods.

However, the crude oil price is now since down by more than 15 per cent from their highs at under $68, and coal prices have since crashed to multi-year lows, so the trend for the terms of trade is more than likely going to remain down. 

Finally, a look at households.

The household saving ratio picked up to the highest level since the September 2022 quarter at 3.8 per cent as incomes increased through the calendar year. 

There should be a bit of a tailwind for households from falling interest rates in 2025, with 2024 having seen a steepling level of mortgage interest paid to lenders.

The wrap

Overall, it was heartening to see the seemingly endless declines in GDP per capita arrested in the final quarter of 2024, even if it was only a tiny gain provisionally recorded. 

Households are set to get some respite on their mortgage repayments in 2025 as more competitive mortgage rates are gradually offered by lenders, but only a steady pick-up in consumption spending is anticipated by most economists.

Dwelling investment was weak again in the December quarter, but should pick up from this calendar year as interest rates are lowered and as developers scramble to tackle the housing shortage.

There has been much debate about whether high levels of government spending and population growth have been justified, given that housing rents and cost of living pressures have been acute.

But, at least unemployment has remained low, and the economy has kept growing...

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    1. Download our property buying guide

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    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 well 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 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. 

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.

Housing prices rebound in February

Sentiment rebounds

Housing prices increased in 7 of the capital cities and across regional markets in February.

Melbourne has turned a corner now, and led the way with a +0.4 per cent increase.

Melbourne prices were down -1.1 over the quarter to be -6.4 per cent lower than at their peak.

Overall, though, sentiment has picked up as buyers sense that lower interest rates are on the way.

Source: CoreLogic

CoreLogic reported that rents rose +0.6 per cent in February, which as the fastest increase since May 2024, but well below the monthly high of +1.2 per cent seen in February 2021. 

Prices are likely to increase in 2025 as interest rates are lower.

You can read CoreLogic's full report here.

In other news, the Melbourne Institute inflation gauge recorded its first decline in six months, declining -0.2 per cent. 

Over the year inflation was +2.2 per cent, down from +2.2 per cent in the preceding month, representing further progress towards containing inflation. 

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P.S. Whenever you’re ready…here are 4 ways I can help you:

    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 well 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 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. 

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: Are big inheritances destroying the 'fair go'?

2-Sense podcast

I joined Batesy to discuss the big property news stories this week.

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

You can also watch the video version on YouTube here:

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P.S. Whenever you’re ready…here are 4 ways I can help you:

    1. Download our property buying guide

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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 well 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 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. 

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.

Housing credit to pick up in 2025

Credit growth solid

Credit growth slowed a touch to 0.5 per cent in January, as businesses borrowed with a little less fervour, but overall credit growth was solid over the year at 6½ per cent.

Housing credit growth also eased a little to 0.45 per cent for the month, as higher mortgage rates weighed, which was the slowest credit growth since June last year. 

Still it's been clear that investors are coming back into the market.

Despite the monthly easing, the housing credit impulse still looks very solid.

In any case, lending for housing will begin to pick up after the first rate cut in 2025.

In other news, international student commencements picked up to a record high of +559,000 over the year to November, some 11 per cent higher than the pre-pandemic prior corresponding period.

No slowdown in international students then...

---

P.S. Whenever you’re ready…here are 4 ways I can help you:

    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 well 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 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. 

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.

What happens after the first rate cut?

Property 2025 webinar

I joined Eric Wu of RealWay Finance to discuss what happens after the first rate cut on the below webinar.

Tune in here (or watch below):

CapEx disappoints, and so do investment plans...

Capital expenditure declines

This was a bit of a surprise.

Markets had expected capital expenditure investment in the private sector in the December quarter.

Instead, mining investment fell -0.6 per cent, and non-mining investment declined slightly by -0.1 per cent. 

Overall, seasonally adjusted CapEx fell -0.2 per cent over the quarter.

Source: ABS

The first estimate for 2025/2026 capital expenditure plans was $148 billion - solid enough, but also arguably a bit disappointing when around $160 billion had seemed more likely. 

Overall, it looks like business investment will weight a little on GDP for the fourth quarter of 2024.

This adds weight to the sense that the private sector of the economy is struggling gamely, while GDP is largely being held up by government spending and public sector activity. 

James Foster stepped through all the key figures here.

Big Picture podcast

Big Picture podcast

I joined Michael Yardney to talk through this month's Big Picture podcast talking points.

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

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P.S. Whenever you’re ready…here are 4 ways I can help you:

    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 well 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 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. 

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.

Inflation sits at the target's midpoint

Inflation at target midpoint

Australia's monthly inflation indicator once again came in at 2½ per cent over the year to January, right in the middle of the target 2 to 3 per cent range.

Source: ABS

This was a little lower than the median market forecast for an annual increase of 2.6 per cent.

Electricity prices were reported as being +8.9 per cent higher, largely due to the expiry of government subsidies in Queensland.

However, the disinflationary pulse does appear to be set in place for the housing sector.

Rents rose by +5.8 per cent over the year, well down from +6.2 per cent in December, and construction costs also appear to have levelled off since June 2024.

New dwelling price inflation slowed from +2.3 per cent to +2 per cent, which was the lowest annual result since June 2021.

Insurance costs were also up by a somewhat less extravagant +5.3 per cent over the year.

Given that these were some of the key drivers of inflation over the past 18 months, this is generally a positive sign for the inflation outlook.

Markets weren't a whole lot moved, with the Aussie dollar trading at 63.3 US cents, down from 63.5 cents earlier this morning, and the 3-year bond yield trading at 3.79 per cent. 

James Foster, as ever, stepped through the key figures here.

Infrastructure boom continues

The latest construction work done figures showed something of an improvement for detached house construction in 2024, driven mainly by increased activity in Perth, Adelaide, and south-east Queensland. 

The construction industry has been grappling with some capacity constraints over recent times, with hot population growth and a large pipeline of transport and mining projects being worked through. 

Attached dwelling construction was mixed, but with an apparent improvement across 2024 in Sydney and New South Wales, where housing shortages have been particularly acute. 

Engineering construction work done continues to be enormously strong, driven by resources projects in Western Australia and a vast pipeline of infrastructure in New South Wales, Victoria, and indeed most of Australia's states and territories. 

Engineering construction work done has increased by well over 50 per cent over the past five years, approaching the heady heights of the resources construction boom in 2012, but this time driven as much by government investment and the tackling of the infrastructure deficit.

---

P.S. Whenever you’re ready…here are 4 ways I can help you:

    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 well 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 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. 

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.

5 property myths busted (podcast)

Australian Property Podcast

I joined Amy Lunardi to bust 5 property myths on the podcast here (or click on the image below):

You can also watch the YouTube version here:

Construction targets to fall flat

New home sales steady

New homes sales picked up a little in January on a seasonally adjusted basis, according to the Housing Industry Association, but remained well below the levels seen through much of last year.

In fact, despite the obvious shortage of housing, sales are running at about ⅔ of the levels seen during the pandemic stimulus. 

Dwelling starts and completions are running at between 40,000 and 45,000 per quarter, well below the 60,000 or so required to meet the government's stated target of 1.2 million well-located new homes over 5 years. 

Construction should begin to pick up from here with interest rates no longer rising and construction costs levelling off, but still it appears likely that the numbers will fall 20 to 25 per cent below the target. 

Further compounding the challenges, according to ABC News new developments are sometimes being delivered on the outskirts of the cities, but without the required schools, transport links, medical centres, shops, and other amenities, seriously challenging liveability in the newly-constructed housing estates.

In other news consumer confidence got a bit of a boost this month, with consumer inflation expectations seemingly commensurate with inflation hitting - and remaining within - the target band.

Source: ANZ

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P.S. Whenever you’re ready…here are 4 ways I can help you:

    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 well 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 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. 

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.