Diamond Prices Regain Their Sparkle | Kanebridge News
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,526,212 (+1.41%)       Melbourne $950,600 (-0.81%)       Brisbane $848,079 (+0.39%)       Adelaide $783,680 (+0.69%)       Perth $722,301 (+0.42%)       Hobart $727,777 (-0.40%)       Darwin $644,340 (-0.88%)       Canberra $873,193 (-2.75%)       National $960,316 (+0.31%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $711,149 (+0.79%)       Melbourne $480,050 (-0.07%)       Brisbane $471,869 (+1.52%)       Adelaide $395,455 (-0.79%)       Perth $396,215 (+0.44%)       Hobart $535,914 (-1.67%)       Darwin $365,715 (+0.11%)       Canberra $487,485 (+1.06%)       National $502,310 (+0.25%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 8,985 (+170)       Melbourne 11,869 (-124)       Brisbane 8,074 (+47)       Adelaide 2,298 (-22)       Perth 6,070 (+20)       Hobart 993 (+24)       Darwin 282 (-4)       Canberra 809 (+43)       National 39,380 (+154)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 7,927 (+125)       Melbourne 6,997 (+50)       Brisbane 1,822 (+3)       Adelaide 488 (+5)       Perth 1,915 (-1)       Hobart 151 (+3)       Darwin 391 (-9)       Canberra 680 (+5)       National 20,371 (+181)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 (-$20)       Melbourne $580 ($0)       Brisbane $590 (+$10)       Adelaide $570 (-$5)       Perth $600 ($0)       Hobart $550 ($0)       Darwin $700 (+$5)       Canberra $670 (+$10)       National $633 (-$1)                    UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $700 (-$20)       Melbourne $558 (+$8)       Brisbane $590 ($0)       Adelaide $458 (-$3)       Perth $550 ($0)       Hobart $450 ($0)       Darwin $550 ($0)       Canberra $540 (-$10)       National $559 (-$4)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,224 (-134)       Melbourne 5,097 (+90)       Brisbane 3,713 (-84)       Adelaide 1,027 (-3)       Perth 1,568 (-46)       Hobart 471 (-3)       Darwin 127 (+13)       Canberra 658 (-32)       National 17,885 (-199)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 8,171 (-343)       Melbourne 5,447 (-170)       Brisbane 1,682 (-22)       Adelaide 329 (+3)       Perth 561 (-11)       Hobart 159 (-6)       Darwin 176 (+16)       Canberra 597 (-12)       National 17,122 (-545)                HOUSE ANNUAL GROSS YIELDS AND TREND         Sydney 2.56% (↓)       Melbourne 3.17% (↓)     Brisbane 3.62% (↑)        Adelaide 3.78% (↓)       Perth 4.32% (↓)     Hobart 3.93% (↑)      Darwin 5.65% (↑)      Canberra 3.99% (↑)        National 3.43% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND         Sydney 5.12% (↓)       Melbourne 6.04% (↓)       Brisbane 6.50% (↓)     Adelaide 6.02% (↑)        Perth 7.22% (↓)     Hobart 4.37% (↑)      Darwin 7.82% (↑)        Canberra 5.76% (↓)       National 5.79% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 1.0% (↑)      Melbourne 0.7% (↑)      Brisbane 0.8% (↑)      Adelaide 0.4% (↑)        Perth 0.4% (↓)       Hobart 1.2% (↓)     Darwin 0.5% (↑)      Canberra 1.5% (↑)      National 0.8% (↑)             UNIT RENTAL VACANCY RATES AND TREND         Sydney 1.3% (↓)     Melbourne 1.6% (↑)      Brisbane 0.9% (↑)      Adelaide 0.5% (↑)      Perth 0.7% (↑)      Hobart 2.2% 2.0% (↑)      Darwin 1.0% (↑)        Canberra 1.7% (↓)     National 1.3% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 27.0 (↑)        Melbourne 28.3 (↓)     Brisbane 32.3 (↑)      Adelaide 26.3 (↑)      Perth 34.9 (↑)        Hobart 33.4 (↓)     Darwin 48.7 (↑)        Canberra 27.6 (↓)     National 32.3 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 27.0 (↓)       Melbourne 29.0 (↓)     Brisbane 33.0 (↑)        Adelaide 27.5 (↓)     Perth 38.2 (↑)      Hobart 33.4 (↑)      Darwin 48.3 (↑)      Canberra 33.2 (↑)      National 33.7 (↑)            
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Diamond Prices Regain Their Sparkle

Pent-up jewellery demand has lifted the gems’ valuations while online sales have grown.

By Will Horner
Fri, Feb 12, 2021 5:32amGrey Clock 3 min

Diamond prices have rebounded from a coronavirus-driven slump thanks to the reopening of some economies in Asia and strong jewellery sales around the world over the holiday period.

Polished diamond prices are up 5.1% from their lowest point in March, putting them at their highest level in nearly a year and a half, according to a gauge compiled by the International Diamond Exchange.

The pandemic dealt a big blow to the diamond industry last year, with every link in the supply chain—from Russian miners to India’s diamond cutters to luxury boutiques in New York—being closed or seeing activity curtailed.

But demand for diamond jewellery has been steadily recovering since retailers began reopening last summer in Asia, tentatively followed by elsewhere in the world, analysts said. With international vacations on ice and restaurants in many parts of the world still closed, wealthy individuals are buying diamonds with surprising voracity.

“This is the most bullish market for diamonds I have seen in probably a decade,” said Paul Zimnisky, founder of research firm Diamond Analytics.

Because diamonds come in a variety of shapes, sizes, colours and qualities, the industry lacks a benchmark price. But market watchers say both rough, mined diamonds and polished stones bought by consumers have seen their prices approach pre-pandemic levels.

A one-carat polished diamond of slightly above-average quality currently sells for US$5,900, Mr Zimnisky said. That is up 14% from a low point in April, while an equivalent rough diamond rose 18% in that time, he said.

Prices popped in December, thanks to strong holiday sales and pent-up demand that built during lockdowns. December is typically a strong time, with jewellery sales normally rising around 120% from November, said Edahn Golan, who runs an Israel-based diamond-market research firm. This year they jumped 160%, he said.

Still, the pandemic’s impact on jewellery sales hasn’t been uniform. Sales of diamond stud earrings saw the largest year-over-year growth of all jewellery categories in 2020, Mr Golan said, as the desire to look good in video calls boosted demand for adornments worn from the shoulders up.

The pandemic also pushed the industry to embrace new technology at a faster rate. Before lockdowns, retailers were sceptical that consumers would be prepared to buy expensive diamonds online. But strong take-up for internet offerings has helped diamond sales recover while modernizing some businesses.

“It has forced our industry to go to a place that we have been slow to get to,” said David Kellie, CEO of the Natural Diamond Council.

The diamond market has fewer gauges of global demand than other, more widely traded commodities, presenting special challenges for analysts.

Google searches for “diamond ring” in the U.S., the country that accounts for around 50% of the world’s diamond consumption, can be a good proxy, said Kirill Chuyko, head of research and mining analyst at Russian brokerage BCS Global Markets. Searches for the term slumped in March but have since recovered to prior levels.

With central banks slashing interest rates to stimulate economies—and some taking rates into negative territory—diamonds are also getting a lift as wealthy individuals opt to put their money into real assets rather than pay a bank to hold it.

Amma Group, an investment house specializing in coloured diamonds, has seen an increase in the number of its clients who would rather take their earnings in the form of physical diamonds than in cash, to protect their wealth from negative interest rates, said Mahyar Makhzani, the group’s co-founder.

The group, which is set to launch its fifth fund later this year, pools investors’ money to buy some of the rarest coloured diamonds at auctions or from individuals and miners. It then holds or sells the diamonds for a higher price, using the profits to buy other stones that it predicts will go up in value. After a set period, the fund sells its diamonds and returns the money to investors.

“There are not more than 100 red diamonds in the world,” Mr Makhzani said. “It’s like owning a Picasso: You know he isn’t going to be making any more.”

Rising demand has also allowed diamond miners to raise prices on the rough diamonds they sell to manufacturers. Russia’s Alrosa raised prices in January while Anglo American’s De Beers is widely believed to have raised its prices for the first time since the pandemic, analysts said. The company doesn’t publicly disclose its prices.

Despite the incentive, the diamond-mining giants are likely to keep supply tightly controlled to maintain higher prices, Mr Chuyko said.

The strength of diamond demand was a rare tailwind for luxury brands during a difficult 2020. LVMH Moët Hennessy Louis Vuitton SE, which last month completed its acquisition of jeweller Tiffany & Co., said recently that jewellery sales were a bright spot in the fourth quarter. Compagnie Financière Richemont SA, which houses jewellery brands Cartier, Van Cleef & Arpels and Buccellati, said jewellery sales were its best performing sector in the final three months of 2020.

Some analysts are sceptical, however, that diamond prices can keep rising. As economies reopen and international travel resumes, the diamond industry will face renewed competition, particularly among the younger consumers it has been seeking to attract, Mr Chuyko said.

“A diamond ring will get you one or two pictures on Instagram,” he said. “But if you go on holiday to Spain you might get 10 pictures per day.”



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Consumers’ initial revenge spending after Covid restrictions eased could be waning, the results indicate, with the biggest pullbacks in food and luxury items. While travel remains a bright spot ahead of the country’s Mid-Autumn Festival, hospitality firms and chain restaurants saw a sharp decline in sales, according to the survey.

And although policy makers have shown their willingness to stabilise the property market, the data showed another month of slower sales and lower prices in both the residential and commercial sectors.

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Nicole Kornitzer, who manages the $750 million Buffalo International Fund (ticker: BUIIX), worries about a “recession of expectations” as confidence continues to take a hit, discouraging people and businesses from spending. Kornitzer has only a fraction of the fund’s assets in China at the moment.

Before allocating more to China, Kornitzer said, she needs to see at least a couple quarters of improvement in spending, with consumption broadening beyond travel and dining out. Signs of stabilisation in the housing market would be encouraging as well, she said.

She isn’t alone in her concern about spending. Vivian Lin Thurston, manager for William Blair’s emerging markets and China strategies, said confidence among both consumers and small- and medium-enterprises is still suffering.

“Everyone is still out and about but they don’t buy as much or buy lower-priced goods so retail sales aren’t recovering as strongly and lower-income consumers are still under pressure because their employment and income aren’t back to pre-COVID levels,” said Thurston, who just returned from a visit to China.

“A lot of small- and medium- enterprises are struggling to stay afloat and are definitely taking a wait-and-see approach on whether they can expand. A lot went out of business during Covid and aren’t back yet. So far the stimulus measures have been anemic.”

Beijing needs to do more, especially to stabilise the property sector, Thurston said. The view on the ground is that more help could come in the fourth quarter—or once the Federal Reserve is done raising rates.

The fact that the Fed is raising rates while Beijing is cutting them is already putting pressure on the renminbi. If policy makers in China wait until the Fed is done, that would alleviate one source of pressure before their fiscal stimulus adds its own.

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