Economists are heralding the second successive month of positive figures in JP Morgan’s all-industry outlook PMI as signs that the global economy is unexpectedly showing signs of growth. For Australia, China’s signs of manufacturing resurgence and other economic stimulus measures are a good sign. Less positive is the deepening drop in Asia’s exports as a result of the global slowdown.
Another metric against-trend is CoreLogic data showing rents have increased by 1 per cent nationally. Sydney, Melbourne and Brisbane all saw increases. That’ll be a double-whammy for renters, who will also be feeling the pinch of a 40 per cent surge in energy prices in the March quarter. That won’t be great news for political parties under pressure to lower energy prices coming into the federal election.
The HIA is leading the charge against Labor’s negative gearing policy, releasing data overnight showing the plans are based on “substantially incorrect” analysis. Chief economist Tim Reardon: “You do not free up a market by increasing taxes and restrictions.” Joining the chorus included Property Investors Council of Australia, Digital Finance Analytics and BMT Tax Depreciation.
This at the same time Australian economists have backed up the IMF’s view of Australia’s property sector, reported yesterday. NAB reckons we’re going to see a total decline in housing construction of about 18 per cent over the next two years, based on current house prices. JPMorgan is calling for two interest rate cuts from the RBA, in expectation of another 5 per cent drop in house prices in 2019.
House prices were unchanged or fell in every cap city last month – but not everywhere. This piece gives sellorhold.com.au’s tips on the house markets where houses are growing in value.
So are our pollies fiddling while Rome burns? The Australian’s Robert Gottliebsen reckons that in playing the “intergenerational fairness” card, Shorten has dropped the violin in favour of a jerry can. The Centre for Independent Studies estimates the government’s budget will boost GDP by $10 billion and create a consumer surplus boost of $3 billion – except they need to win government back in order to implement those plans. Labor has given a firm “no” to implementing stage three of the budget’s tax plan.
Both sides of politics have their work cut out; the latest debt-to-income survey out of EY’s hallowed halls shows less than a third of Australians expect to reduce their debt load this year – which, considering our current household debt-to-income ratio is 190 per cent, leaves our economy especially vulnerable according to the RBA.
Speaking of debt, this piece by the ABC reckons millennials aren’t a drag after all; in fact, they’re helping their parents financially in greater numbers.
If you detect a sense of urgency from your Domain sales contacts this week, this could be why. Domain Group shares have dropped 7 per cent yesterday after Macquarie downgraded the stock, following CoreLogic data showing listing volumes have fallen significantly in the last quarter.
But can you trust any of this? Yes, according to NewsMediaWorks’ AdTrust survey, which found newspapers and news websites ranks as the most trusted source of content.
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