Rents go new normal
According to RP Data, rents nationally grew by only 1.5% in the year to May – in line with falling yields in every asset market. Rents in Canberra, Darwin and Perth actually recorded falls.
We had stronger than expected jobs figures last week, and the unemployment rate fell from 6.2 to 6.0%. Still the envy of the world. A lot of the jobs gain though has been in part time employment, so it’s not quite as strong as it seems.
… but wages doing nothing much
Wages are still growing at a snails pace though…
… but are in line with smaller increases in overall GDP
But this is just a reality of life in developed mature economy. Big gains are harder to come by. This is the new normal. Rents growth will be soft, and so will output and wages growth.
Business Confidence strikes a brighter tone…
Business confidence has rallied to its highest levels in nearly a year, while conditions also lifted.
… Because they’re making more money.
Company profits lifted, with ex-mining doing some heavy lifting against tougher times for miners. This should help the investment outlook.
The Aussie dollar weaker, but not weak enough
The Aussie dollar continues to fall, as the US dollar rallies. But the Aussie battler is still strong by international standards, and though we’ve fallen against the US, other currencies (the blue line below) have fallen more. Keeps the door open to further rate cuts.
It’s all about investors
This chart is sending a lot of blame investors’ way. This is housing finance, with investors on the break away.
Note though, that this doesn’t accommodate the shift from FHBs to First time investors, so it’s not as bad as people will tell you it is….
Have a great week