This is our post-election Rant, where Edwin and I discuss the fall-out on property from the results. Prices will be driven higher in some areas, thanks to supply pressure and increasing demand, but not uniformly, as there are other important factors in play…
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Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
So now we know, Labor is headed into a landslide result from the election, after Liberal votes fell away and the opposition leader Peter Dutton lost his seat. If the number holds through to the end of the count, it will be the highest two-party preferred vote since World War II, exceeding the 55.7 per cent Liberal leader Malcolm Fraser achieved in 1975.
So was this a vote against something, or a vote for something? A bit of both, as it turned out. Australians overwhelmingly preferred Labor’s version of that future and rejected that of the Liberals – and of Dutton himself, negative and disordered. When the campaign started, what looked more like a bunch of ill-disciplined amateurs was up against seasoned professionals.
The Liberals’ condemnation of Labor debt and reckless spending didn’t stop it from following suit, even raising the deficit over the next two years. Its promise of tax reform was risible. Its policies on defence and housing were too little too late to even register in the fog of the campaign. And nuclear was a dud, even if the cost was uncertain.
Actually, there are also parallels with the recent Canadian election where ex. Central Bank chief Mark Carney ran to victory last Monday, running as the candidate best-equipped to defend Canada’s sovereignty against Donald Trump, though he emerged with a minority government. As a veteran central banker who helped establish stability amid first the 2008 financial crisis and then Brexit, Carney’s argument to Canadians was that he was the consummate fixer. “I am most useful in a crisis,” he said on the campaign trail. “I’m not that good at peacetime.” It was an argument that convinced many voters, who gambled that what the country needed was a safe pair of hands.
While Trump figured prominently in the early days of the federal election to Carney’s benefit, many of the issues that previously fueled growing support for the Conservatives are likely to bubble back to the surface in the coming months. Housing remains unaffordable, the cost-of-living crisis hasn’t yet abated and wage growth feels stagnant to young workers. A somewhat chastened Conservative party, leader lost his own seat!
Ditto in Australia, where the crushing victory over the Coalition, landed at least 14 seats from the opposition and Greens, including Peter Dutton’s electorate of Dickson, leaves Labor well positioned to win a third term at the next election. The scope of Labor’s victory means the number of seats required to win next time seems insurmountable rather than just extremely difficult this time.
The truth is, without big change not reflected in this campaign, all Australians will pay for government largesse with little on offer beyond more spending to meet the country’s urgent challenges.
Remember Labor’s emphatic victory came despite some pretty average budget management, debt and deficits do not go away, and the government needs to be serious about addressing them. The stage is Labor’s, but don’t hold your breath for the reform Australia needs!
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This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering crypto and commodities along the way.
It has been another momentous week on the markets, having fallen hard in reaction to Trump’s Liberation Day tariffs, but which have now clawed back most of those losses, helped by strong economic data and potential easing of trade tensions between the US and China, and a general watering down of tariffs from the US. The tit-for-tat tariffs between the world’s two largest economies have kept investors on edge, with both sides unwilling to be seen backing. But the negotiation process is likely to take months, if not longer as China said on Friday it was assessing the possibility of trade talks with the US and urged officials in Washington to show “sincerity”.
Investors are turning their focus to potential winners from a new world order fashioned by Trump as markets return to a semblance of calm. Should the odds of a US recession grow, the pivot away from US equities and dollar-based assets may continue as markets seem to have swung to believing that U.S. President Donald Trump is backing away from his more belligerent tariff threats, and that a more receptive Washington is closing in on several bilateral trade deals. April 30 marked the first 100 days of Trump’s second term so is Trump more bluster than beef? We will see.
The Global MSCI Index is now 0.94% higher year to date, following a significant drop, and an 11% rise over the past month. The STOXX 600 in Europe has risen more than 8% over the past month, following its earlier fall, to be 5.68% higher year to date. The UK FTSE 100 capped off its longest winning streak on record with a 15th consecutive daily increase – the longest run of positive days in a row in history for the British benchmark index, while the Australian 200 closed at a two-month high on Friday. Equity benchmarks in India, Mexico, Brazil and South Korea have recouped all of their losses since the tariff shock and are among the best performers globally. Chinese and Hong Kong stocks have stumbled as a stand-off between Washington and Beijing continues.
US markets rallied, with the DOW up 1.39% on Friday, though still down 2.88% year to date, while the S&P 500 rose 1.47% to be 4.63% lower from Jan 1st, while the NASDAQ rose 1.51% to be down 6.9% year to date. The VIX was down 7.8% on Friday, to 22.68, though still 30.7% up year to date, showing fear has not altogether gone away.
There are risks across markets, and the trends up and to the right are not likely to be linear. More than ever, an air of caution remains appropriate. Just remember 21 times PE is big, and means if there is Beef in the Trump tariffs then markets are over priced. But if its bluster, as the markets are thinking, then even so, markets are expensive.
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The current narrative that pressures on households are easing, as recycled through the election campaign, are questioned when you look at the real data. So today I walk through our latest analysis of our 52,000 household surveys.
The findings reveal that, whilst at the margin there has been some slight improvement for some, the truth is many remain under extreme pressure.
In our upcoming future show, scheduled for the 13th May, we will look in even more detail at post codes nominated by our followers, so drop suggestions in the comments below if there are specific post codes you would like me to feature in that show.
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As the election approaches, I wanted to underline again the dramatic issues renters are facing across the country. I will be publishing my latest household surveys for April tomorrow, but Anglicare Australia just released their Rental Affordability Snapshot report for 2025, based on a survey of over 51,000 rental listings across the country using data from realestate.com.au.
They have measured affordability in Australia’s rental market for sixteen years and have witnessed the struggle faced by Australians on the lowest incomes. Nationally, the situation has remained dire for most household types compared to 2024.
They point out that the private rental market is simply impossible for Australians on low incomes. But this is not by accident.
While supply is important, it is not the silver bullet for the housing crisis. Australia’s private rental system is not designed to provide affordable homes to renters, especially those on low incomes.
Australia’s housing crisis has been building for decades, with policy settings exacerbating and incentivising the degradation of affordability. Australia’s spending on housing has slowly divested a direct role for government to play in the provision of housing, instead prioritising private subsidy schemes for renters and investors alike, with neither producing any long-term or notable benefit. Tax concessions like negative gearing and the Capital Gains Tax discount do little to incentivise affordable housing, instead providing more opportunity for wealth generation for investors. The housing system is not designed to provide housing, it is designed to provide profit.
The housing crisis is the result of policy decisions made by governments. These are decisions that can, and must, be reversed so that every Australian can find a home of their own.
However, against that yardstick, none of the political parties have stepped up despite the vague promises made through the election campaigns. The 35% of people in the rental sector and rising, have little hope despite there being a road-map which could solve the problem of rental affordability.
As Anglicare says this is by design, and to my mind not acceptable in a civilised modern Australia. Without bold choices, inequality will only entrench further. It is time Australia chooses a future where every Australian can find a place to call home!
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Well superficially, headline and trimmed mean inflation are both finally back inside the Reserve Bank of Australia’s target band based on the latest data from the ABS today. Annual CPI inflation was 2.4 per cent in the March quarter, unchanged from the December quarter. Trimmed mean annual inflation was 2.9 per cent, down from 3.3 per cent in the December quarter.
But some important points to make about this result. First, of course it means that prices continue to rise, but at a lower rate than through the inflationary spike we have hade for the past 3 years. The cumulative effects are that prices remain substantially higher relative to incomes. And CPI does not include costs of land, or mortgage repayments, and only a weak proxy for housing.
Second, the Government support for energy, particularly electricity has pulled the inflation measure lower than it would otherwise be.
And in addition, the CPI weightings were revised this time around. The weight for Electricity fell due to lower electricity costs from the introduction of the Commonwealth Energy Bill Relief Fund rebates.
So although the underlying rate of 2.9% was higher than analysts were expecting, cue the calls for an interest rate cut when the RBA board meets on May 19 and 20. Markets are tipping it, economists expect it, and corporate Australia and households would welcome it. Bond traders are betting on a 25 basis point cut. Earlier this month, bond traders were pricing in an almost 50:50 chance the RBA would deliver a jumbo rate cut after US President Donald Trump’s sweeping tariff threats raised concern about the global growth outlook. But the terminal rate – and how quickly we get there – is the battleground.
But the bare fact is, inflation is down due to Government transfers from taxation, to direct subsidy, lifting debt. So we are paying for this one way or the other. Something to think about at election time. And more inflationary spending is promised by both major parties….
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This is an edit of a live discussion as I explore with Chris Bates the pressure to get onto the property ladder, and how people manage to stay on, in the light of the current election campaigns, and expected market dynamics ahead. We will also explore the role of a broker and future of property advice.
Chris Bates is the CEO of Alcove Mortgage Brokers, https://youtu.be/-sYaRuExxXM
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
As we count down to the election, we look at the latest property news with our insider Edwin Almeida. Markets are slowing ahead of the winter season, though are still tracking ahead of last year in terms of listings, if not auctions.
We also look at some of the underlying currents in the markets, from the quality of construction, through the planning changes and also demand factors from migration.
And we even cover the price of eggs!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Despite the call for even more new building across Australia to meet the current demand for somewhere to live, it is worth noting that compared to many other countries we have been building more per 1,000 than almost all other countries. And we have talked before about the pressure on builders due to higher construction costs, lack of skilled tradies, and contention with state and federal construction projects.
But beyond this, and despite the promise to build 1.2 million homes over 5 years from Albo, there is another darker story, which I want to discuss today. Its this, what exactly is coming out of the end of the construction sausage machine?
To be fair, I am sure there are many building firms who are doing the right thing, and delivering well specified and finished homes. But judging by my recent one to one conversations, there are many confused and dissatisfied owners who have been conned by poor quality construction and finish, and have signed away their rights towards the end of the project without fully appreciating what they have done. As a result, when defects do occur, often they have limited recourse and end up carrying a financial burden for years. This can be true for units, where the owners corporation might also get involved, but also stand-alone houses and villas too.
The real problem is whilst you can have all the planning controls and specifications in the world, unless they are translated by the builder into the project, they are all but worthless.
And some of the stories I have been dealing with recently have cost the owner not hundreds but thousands of dollars in addition to the cost of the build. And whilst there are indemnity schemes, in theory to protect people should builders fail, even here there are gaps. Big gaps.
So, my message is be very careful if you go down the new build route, as there are potential bear traps seemingly everywhere! And let me say, no state of territory is immune, and recently the ACT seems to be a particular hot spot.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering commodities and crypto on the way.
I am minded this week of a 1930’s novel called Things Fall Apart, because it seems to me we saw a shattering of the Trump reform wave less than 100 days after his inauguration. Indeed, the Washing Post has a similar headline.
Headlines from a 45 minute press conference on Thursday were all over the show, raising questions about Trump’s intentions on both the future of America’s tariffs on China, the future of Federal Reserve chairman Jerome Powell, and the broader topic of central bank independence.
Meantime In a highly anticipated speech directed at the IMF and World Bank, Treasury Secretary Scott confirmed that Trump had no plans for now to cut the Chinese tariff rate, and while a deal between the countries was one of Trump’s big goals, talks could actually take years.
While Donald Trump loves chaos and the world turning on his every utterance – this is a feature of his approach, not a bug, what’s remarkable is that the market keeps falling for it. There’s clearly precious little signal in all this noise.
We should note that such wild rides on the market benefit traders, as algorithmic trading grabs the momentum the swinging headlines create. Investors need to learn to live with these wild market swings which are particularly bad now – the S&P 500 has gained or lost at least 1 per cent in seven of the past 10 sessions, putting April on track to be the most volatile calendar month since 2020 – but while Trump’s tariff war continues, we should expect these whipsaws to continue.
The Dow ended slightly higher, and up 2.48% for the week, while the NASDAQ ended the week, up 6.73%. The MSCI Global index lifted 3.95% to Friday, while the European STOXX 600 was up 2.77%. The ASX 200, which was closed on Friday, was up 1.91% over the shortened week of trading.
Ahead, we should continue to see more market volatility as the Trump behemoth rolls on. A behemoth is defined as a huge or monstrous person or thing, which seems appropriate, as we try to figure out the full consequences and ask whether things will indeed fall apart.
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Go to the Walk The World Universe at https://walktheworld.com.au/
