Australia to outshine its peers in ‘surprisingly resilient’ global economy
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,655,505 (-0.06%)       Melbourne $994,898 (+0.02%)       Brisbane $991,841 (+1.33%)       Adelaide $889,373 (+1.26%)       Perth $861,566 (+0.49%)       Hobart $729,893 (-1.65%)       Darwin $669,344 (+0.35%)       Canberra $999,769 (+1.27%)       National $1,055,910 (+0.34%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $749,436 (-0.10%)       Melbourne $494,327 (+0.46%)       Brisbane $554,094 (+2.77%)       Adelaide $439,361 (-1.14%)       Perth $456,655 (-0.27%)       Hobart $524,871 (-0.43%)       Darwin $349,455 (+1.52%)       Canberra $494,554 (-1.96%)       National $530,871 (+0.07%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,048 (-72)       Melbourne 14,823 (-272)       Brisbane 7,999 (+9)       Adelaide 2,372 (-66)       Perth 6,238 (-89)       Hobart 1,265 (-29)       Darwin 232 (-6)       Canberra 1,020 (0)       National 43,997 (-525)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,719 (-61)       Melbourne 8,033 (-189)       Brisbane 1,615 (-4)       Adelaide 391 (-5)       Perth 1,570 (-29)       Hobart 203 (-10)       Darwin 394 (-6)       Canberra 1,010 (+7)       National 21,935 (-297)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $820 ($0)       Melbourne $600 (-$10)       Brisbane $640 ($0)       Adelaide $610 ($0)       Perth $670 ($0)       Hobart $550 ($0)       Darwin $700 ($0)       Canberra $680 ($0)       National $668 (-$1)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 (-$25)       Melbourne $550 ($0)       Brisbane $630 ($0)       Adelaide $500 ($0)       Perth $640 (+$13)       Hobart $450 ($0)       Darwin $513 (+$13)       Canberra $570 ($0)       National $589 (-$2)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,497 (+71)       Melbourne 5,818 (+35)       Brisbane 4,141 (+99)       Adelaide 1,399 (0)       Perth 2,377 (+32)       Hobart 400 (+17)       Darwin 111 (+17)       Canberra 604 (+9)       National 20,347 (+280)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 9,083 (+248)       Melbourne 4,637 (+100)       Brisbane 2,182 (-27)       Adelaide 393 (+2)       Perth 731 (-10)       Hobart 130 (-7)       Darwin 144 (-8)       Canberra 684 (+72)       National 17,984 (+370)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.58% (↑)        Melbourne 3.14% (↓)       Brisbane 3.36% (↓)       Adelaide 3.57% (↓)       Perth 4.04% (↓)     Hobart 3.92% (↑)        Darwin 5.44% (↓)       Canberra 3.54% (↓)       National 3.29% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND         Sydney 5.20% (↓)       Melbourne 5.79% (↓)       Brisbane 5.91% (↓)     Adelaide 5.92% (↑)      Perth 7.29% (↑)      Hobart 4.46% (↑)      Darwin 7.63% (↑)      Canberra 5.99% (↑)        National 5.77% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.8% (↑)      Melbourne 0.7% (↑)      Brisbane 0.7% (↑)      Adelaide 0.4% (↑)      Perth 0.4% (↑)      Hobart 0.9% (↑)      Darwin 0.8% (↑)      Canberra 1.0% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.1% (↑)      Brisbane 1.0% (↑)      Adelaide 0.5% (↑)      Perth 0.5% (↑)      Hobart 1.4% (↑)      Darwin 1.7% (↑)      Canberra 1.4% (↑)      National 1.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 30.3 (↑)      Melbourne 31.5 (↑)      Brisbane 31.7 (↑)        Adelaide 25.7 (↓)     Perth 35.4 (↑)      Hobart 33.7 (↑)        Darwin 36.2 (↓)     Canberra 32.0 (↑)        National 32.1 (↓)            AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 31.3 (↑)      Melbourne 31.9 (↑)      Brisbane 32.1 (↑)        Adelaide 24.8 (↓)       Perth 38.7 (↓)     Hobart 37.6 (↑)        Darwin 46.5 (↓)     Canberra 39.2 (↑)        National 35.3 (↓)           
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Australia to outshine its peers in ‘surprisingly resilient’ global economy

It’s a slow start for 2024 but the longer term outlook for the local economy is strong

By Bronwyn Allen
Tue, Apr 23, 2024 10:32amGrey Clock 3 min

The International Monetary Fund (IMF) has described the global economy as “surprisingly resilient” amid rapid interest rate rises to quell high inflation since 2022, post-pandemic supply chain disruptions, a short-term spike in energy prices due to the war in Ukraine and increased geopolitical tensions involving China and the Middle East.

The IMF’s biannual World Economic Outlook report says the world has so far avoided stagflation and recession, with large pandemic savings enabling households to cope with higher rates and inflation, and strong immigration in advanced economies creating unusually tight labour markets.

IMF economic counsellor Pierre-Olivier Gourinchas said most indicators point to a soft landing for the global economy and the IMF now expects “less economic scarring from the pandemic. He noted that markets had reacted exuberantly in recent weeks to the prospect of central banks lowering interest rates soon.

However, the IMF says global growth will moderate over the next five years to its lowest level in decades. It projects 3.2 percent global growth in 2024 and 2025, the same pace as 2023, with still-high borrowing costs, the withdrawal of fiscal support and weak productivity growth weighing economic activity down.

Australia is expected to underperform other advanced economies, especially the United States, this year but will surge beyond them from 2025. The IMF predicts annual gross domestic product (GDP) growth of 1.5 percent in Australia in 2024, which is well below our long-term pre-pandemic average of 2.5 percent. The US is expected to book above-average growth of 2.7 percent in 2024 and the world’s advanced economies are tipped to average 1.7 percent growth.

Australian economic growth will then move above other advanced economies and maintain upward momentum through til 2029. The IMF predicts 2 percent GDP growth for Australia in 2025 and 2.3 percent in 2029. For the US, the IMF expects 1.9 percent growth in 2025 and 2.1 percent in 2029. For the advanced economies in aggregate, the IMF forecasts 1.8 percent growth in 2025 and 1.7 percent in 2029.

The IMF said higher interest rates had had less effect on the US economy compared to Australia because most US mortgages are on long-term fixed rates and household debt has been lower since the global financial crisis. In Australia, most loans are on variable rates and therefore immediately impacted by every rate rise, household debt is high, and housing supply is restricted.  

The exceptional recent performance of the United States is certainly impressive and a major driver of global growth, but it reflects strong demand factors as well, including a fiscal stance that is out of line with long-term fiscal sustainability,” said Mr Gourinchas.

An example of unusual fiscal policy is the Inflation Reduction Act, which includes US$369 billion in new spending to encourage green energy investment. This raises short-term risks to the disinflation process, as well as longer-term fiscal and financial stability risks for the global economy since it risks pushing up global funding costs, he said.

While things are going well now, Mr Gourinchas said risks to global economic progress remain.

On the downside, new price spikes stemming from geopolitical tensions, including those from the war in Ukraine and the conflict in Gaza and Israel, could, along with persistent core inflation where labour markets are still tight, raise interest rate expectations and reduce asset prices. A divergence in disinflation speeds among major economies could also cause currency movements that put financial sectors under pressure.

Mr Gourinchas said growth in China could falter, hurting trading partners, without a comprehensive response to its property sector downturn. “Domestic demand will remain lacklustre for some time unless strong measures and reforms address the root cause. Public debt dynamics are also of concern, especially if the property crisis morphs into a local public finance crisis.

He also noted that weak productivity growth remains a challenge for the whole world and “much hope rests on artificial intelligence delivering strong productivity gains in the medium term”.



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The sticky economic factor making an interest rate drop unlikely this year

It’s a key indicator in the RBA board’s decision making process, but it is proving difficult to move in the right direction

By Bronwyn Allen
Thu, May 30, 2024 2 min

The consumer price index (CPI) rose in April to an annual rate of 3.6 percent, which was 0.1 percent higher than in March, raising doubts about an interest rate cut this year as inflation starts looking stickier than expected. This is the second consecutive month of small rises, potentially indicating that Australia is experiencing the same stalled progress in bringing inflation down that is being seen in the United States, as both nations approach their central banks’ target inflation bands.

In Australia, the target inflation band is 2 to 3 percent, with the Reserve Bank of Australia (RBA) aiming to achieve the midpoint under its new agreement with the Federal Government following a formal review. In its interest rate decision-making, the RBA does not give as much weight to the monthly inflation data because not all prices are measured like they are in the quarterly data. On a quarterly basis, inflation has continued to fall. In the March quarter, the annual rate of inflation was 3.6 percent, down from 4.1 percent in December, according to the Australian Bureau of Statistics (ABS).

CBA economist Stephen Wu noted the April data was above the bank’s forecast of 3.5 percent as well as the industrywide consensus forecast of 3.4 percent. He predicts the next leg down in inflation won’t be until the September quarter, when we will see the effects of electricity rebates and a likely smaller minimum wage increase to be announced by the Fair Work Commission next month compared to June 2023.

The most significant contributor to the April inflation rise were housing costs, which rose 4.9 percent on an annual basis. This reflects a continuing rise in weekly rents amid near-record low vacancy rates across the country, as well as significantly higher labour and materials costs which builders are passing on to the buyers of new homes, as well as renovators.

The second biggest contributor was food and non-alcoholic beverages, up 3.8 percent annually, reflecting higher prices for fruit and vegetables in April. The ABS said unfavourable weather led to a reduced supply of berries, bananas and vegetables such as broccoli. The annual rate of inflation for alcohol and tobacco rose by 6.5 percent, and transport rose by 4.2 percent due to higher fuel prices.

Robert Carnell, the Asia Pacific head of research at ING, said they no longer expect a rate cut this year after seeing the April data. Mr Carnell said an increase in trend inflation was apparent and “rate cuts this year look unlikely”. In the RBA’s latest monetary policy statement, published before the April CPI was released, it said: “Inflation is expected to be higher in the near term than previously thought due to the stronger labour market and higher petrol prices. But inflation is still expected to return to the target range in the second half of 2025 and to reach the midpoint in 2026.”

 

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This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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