Although the official measure of house price inflation suggested Sydney property gains remained solid in the June quarter, more timely indicators point to a softening in this long red-hot market. That’s consistent with estimates suggesting mortgage affordability constraints in Sydney are now around previous peak levels. Meanwhile, better value appears evident in other capital cities,
Despite sluggish overall growth reported in the National Accounts, a range of more partial indicators suggest the Australian economy is enjoying reasonable – though not robust – growth from a diversified range of sources. Continued moderate growth and low inflation appear the most likely outcome over the coming year, which would be consistent with steady local interest rates and a focus on income over growth opportunities in the Australian equity market.
The decision by major banks over recent weeks to unilaterally raise interest rates on residential property loans, especially for investors, appears to be officially sanctioned and could helpfully ease demand pressures in the Sydney and Melbourne housing markets. That said, greed can be good! These actions could also conveniently help boost bank net-interest margins,
With assets under management at an all-time high, and increasingly more widespread use of Exchange Traded Funds (ETFs), the Australian ETF industry came of age in 2016, and continues to follow in the footsteps of more mature markets around the globe.
The ETF industry in Australia continues to evolve, as new waves of investors demand more sophisticated types of products.
With the silly season upon us, I feel it’s the perfect time to reflect on 2016. It has been a big year for ETPs in Australia and around the world! I’ll also try to make some predictions on where I think the future developments may lie for the Australian exchange traded products industry,
The recently released minutes to the Reserve Bank of Australia’s May policy meeting – at which it cut official interest rates – highlighted the fact that it was near-term downside risks to inflation, not economic growth, that encouraged the Bank to act. Given the challenge of pushing underlying inflation back up,
The Reserve Bank of Australia’s decision to cut the official cash rate last week – together with growing expectations it will cut interest rates further – has thrown the spotlight back onto yield plays in the Australian equity market. Although financials have faced bearish investor sentiment in recent months, their still attractive yields and relatively cheap valuations suggest they remain an investment worthy of serious consideration.
In this informative 10 minute interview, David discusses the collapse in commodity prices, the Australian economic outlook, the Fed, and the biggest risk in global markets next year. Click on the image to watch the full interview now.
Signs are accumulating to suggest that Australia’s housing sector upturn is on its last legs. Yet due to the housing sector’s relatively small direct share of the economy, there is a risk that many analysts will underestimate the likely downside impact – which could be significant due to both the sector’s cyclicality and its relatively important multiplier effects.
When it comes to making pronouncements on the economy, it’s good for major institutions such as the Federal Treasury and the Reserve Bank to be upbeat when they can – but the latest set of forecasts from the RBA seem more a case of hope over grounded reality. This affirms my view that the economy is likely to disappoint in 2016 and the RBA will be required to cut interest rates further.