Consumer Spending Up Over the Year
According to NAB’s transaction data, consumer spending has remained steady, with total spending on both goods and services flat. Despite this, discretionary spending saw a modest increase of 0.6% month-on-month, while non-discretionary spending declined by 1%. The decrease in non-discretionary spending was primarily due to a significant drop in expenditure on utilities and fuel. Annual growth in consumer spendingConsumer spending is up 5.6% over the past 12 months. However, consumption growth has softened since the beginning of this year, according to Alan Oster, group chief economist at NAB. You may read the whole article here:https://bit.ly/3zPcrcq
ANZ Predicts Possible RBA Rate Hike in August
Despite speculation that the Reserve Bank of Australia (RBA) might raise the official cash rate at its August meeting, ANZ has forecasted that rates will remain unchanged until February 2025, when it predicts a rate cut. The bank noted that while the Reserve Bank kept the cash rate on hold at 4.35% at its June meeting, the post-meeting statement was slightly more hawkish, with the RBA board stating that they are willing to “do what is necessary” to return inflation to target and will remain vigilant to upside risks in inflation. “Following the stronger than expected monthly inflation print for May, there has been some talk about the possibility of a hike at the RBA’s August meeting,” ANZ said in its report, authored by economists Sophia Angala, Madeline Dunk and Catherine Birch. You may read the whole article here:https://bit.ly/3zD0o29
Consumers Fear Rate Hike Impact
An unexpected drop in confidence saw consumer expectations for variable mortgage rates jump 12.8 per cent in July. According to the Westpac-Melbourne Institute’s Mortgage Rate Expectations Index, this is “the steepest monthly rise since we began running this question in every survey at the start of 2022.” The historical average figure of the index is 143.8. In the last three months, however, there has been a 30 per cent surge, with a below-average read of 122.8 in April to 159.2 in July. What is being dubbed a “sudden hawkish turn” is reportedly the most abrupt change seen in the last seven years. Currently, just under 60 per cent of consumers are expecting a mortgage rate rise over the next year. You may read the whole article here:https://bit.ly/3W0gzhj
Bendigo Bank: RBA Cash Rate to Stay Unchanged All Year
Resolve Finance has announced that the 2024 financial year was a record year for the business, with loan volumes surpassing $1.74 billion. This represents a substantial 11% year-on-year increase for the broker franchise, highlighting its continued growth, and success of the franchise business in the highly competitive mortgage broking industry. It comes after a bumper 2023 for the broker network. A significant portion of this growth can be attributed to strong first-time buyer activity. The number of First Home Buyer schemes and grants Resolve brokers have assisted with has increased by 29% from FY23 to FY24. You may read the whole article here:https://bit.ly/4eT0anx
Population Surge Intensifies Housing Shortages
Australia’s national shortage of dwellings has become more critical due to record population growth, according to Hotspotting. In 2023, the country’s population increased by 651,000, the highest in history, with 84% of that growth attributed to overseas migration. “The record level of population growth last year did not cause the shortage of dwellings, including the under-supply of rental homes,” said Terry Ryder director at Hotspotting. You may read the whole article here:https://bit.ly/4bvSa9f
Australian Household Spending up Slightly
Household spending in Australia rose 0.1% over the past year, according to figures recently released by the Australian Bureau of Statistics (ABS). Spending on services increased by 2.3%, driven by higher expenditures on health and other services, while spending on goods fell 2.5%, led by declines in clothing, footwear, and goods for recreation and culture. Non-discretionary spending rose 1.8%, with significant contributions from health expenses and vehicle purchase and operation costs. Discretionary spending decreased by 1.9%, primarily due to reduced spending on clothing, footwear, and accommodation services. You may read the whole article here:https://bit.ly/4cxUJJ0
Rent Prices Rise in June Quarter – PropTrack
The median weekly rent for dwellings in Australia’s capital cities rose by 3.2% to $640 in the three months ending June, following a 4.2% increase in the March quarter. Latest market insight from PropTrack showed even stronger rental growth in regional areas, which posted a 3.9% increase in the same period, pushing the median weekly rent to $540. Rents are now 10.3% higher than a year ago in capital cities and 8% higher in regional areas. Units have seen greater rent increases than houses, both quarterly and annually, narrowing the rental price gap between the two. In capital cities, houses now have only a $30 premium over units. You may read the whole article here:https://bit.ly/3Wb4t6v
Home Prices Set to Surge Over Next Five Years
There will be a substantial increase in home prices in Australia by 2029 if current growth rates persist, new analysis of PropTrack data has revealed. If property prices continue their current trajectory, homes in traditionally affordable areas on the outskirts of major cities will likely reach million-dollar valuations, according to the property data insights provider. Paul Ryan, senior economist at PropTrack, clarified that the modelling is not a forecast but illustrates the extraordinary price growth over the past five years and its potential future implications. You may read the whole article here:https://bit.ly/4eQh31Z
Another Rate Rise Impact Housing Market
An increase to the cash rate could slow demand in a housing market that’s already showing signs of cooling. Should all things fall into place to force the Reserve Bank of Australia’s (RBA) hand to increase the official cash rate in August, prospective buyers would see their dreams of home ownership slip further out of reach, CoreLogic’s head of research Eliza Owen has said. A further 25-bp rise in August (taking the cash rate to 4.6 per cent) would take monthly repayments on the current median dwelling value to over $4,000 per month. You may read the whole article here:https://bit.ly/3zpYWjw
RBA Hints At Possible Rate Hikes
Mortgage holders should brace for potential interest rate increases, as minutes from the latest Reserve Bank of Australia (RBA) meeting reveal the board’s readiness to act if inflation surges. The June 17-18 meeting highlighted the ongoing challenge of controlling inflation, with RBA governor Michele Bullock and the board acknowledging that if inflation expectations were to rise materially from current levels, it could require significantly higher interest rates to bring inflation back to target. Days after the monetary policy meeting, inflation actually rose, with the Australian Bureau of Statistics (ABS) reporting that the monthly consumer price index rose to 4% in the year to May, up from 3.6% in April. You may read the whole article here:https://bit.ly/45TZxpB
