Monday 2 December 2024
The house price boom in Australia is over, with Sydney and Melbourne both going backwards last month.
And more, including:
Prime Minister Anthony Albanese hints that the federal election won’t be until well into next year
The number of COVID cases surge
Plus the ACCC green lights the Qatar-Virgin tie up, and Donald Trump threatens 100pc tariffs on some countries.
Plus don’t miss the new episode of The Property Pendulum, brought to you by Domain and Fear & Greed. This week’s episode: the hottest trends in homes right now. Get it from APPLE, SPOTIFY, or anywhere you listen to podcasts.
Today on Fear and Greed. The house price boom in Australia is over, with Sydney and Melbourne both going backwards last month. Prime Minister Anthony Alberezi hints that the federal election won't be until well until next year, and the number of COVID cases surge, plus the ateable Sea green lights the Qatar Virgin tie up and Donald Trump threatens one hundred percent tariffs on some countries. Welcome to Fear and Greed. Daily business news for people who make their own decisions. It is Monday, the tewond of December twenty twenty four. Oh Michael Thompson and good morning Sean Aylmer.
Good morning Michael Sewan.
The main story this morning the house price boom is over, with prices across the country flat for the month of November. That is the weakest Australia wide result since January last year, and.
November is all important its peak selling season. It's the third month of the spring selling season to be specific, so it really matters. Core logic figures show prices were up just to touch across the country twenty two months in a row of rises, but probably that was the last increase for this cycle, it was only zero point one percent. The downturn is gathering speed in Melbourne and in Sydney, while even the hot mid tier capital cities Adelaide, Brisbane and Perth are losing steam, a big reason why prices have come off the boil. Capital city listings are much much higher, in fact, sixteen percent higher than three months ago. So Melbourne went backwards during November. Over the past twelve months, it's now off more than two percent. The worst of the capital cities, Sydney went backwards in November, first time that's happened for quite a while. It's up for the full year, up about three percent, but still it went backwards last month in both cities, and of course they are the two big cities. The number of listings are about ten percent above the long term average. There's one other capital city to go backwards last month, Hobart. For the year, Canberra is also gone backwards. Best is still Perth. In fact, for the year it's up twenty one percent, but the heat has definitely come out of that market. The other interesting trend from the Core Logic data, regions have tended to be stronger. The regional index is actually up more than one percent, whereas it's flat in terms of the capital cities.
I'm still just blown away by the Perth performance overall. It is just it is like looking at that when you look at house price growth now for the last kind of twenty years and look at that into the future, you're just going to see this blip, right, this enormous jump for Perth.
Yeah, Perth has a bit of a history of that though over the very very long term, and you get a lot of because of the mining industry, so it really sort of ebbs and flows a fair bit with the mining industry. So there's been times that Perth prices go through the roof and other times they absolutely sink much harder than anywhere else.
It's amazing. So really, if you kind of take a step back, the housing market seems to be heading into twenty twenty five not looking so good and at least relative to the performance of the I've said that just the past couple of years really.
Exactly, and that was demonstrated over the weekend. If we look at the auction results core Logic figures the last auction weekend of the spring selling season, the national preliminary clearance rate was down to sixty three point four percent. Best way of what are you laughing at?
My? Could you have said that any more? Slowly? Just then you just I could just see you go, I'm going to nail this first time preliminary clearance right like, well done? Well please shouldn't have drawn attention to it. I'm not probably now just jinctyn.
Slowly or not. The interesting thing was the NPC national preliminary clearance rate fell to its lowest level of the year. Michael, you are taking the seriousness out of this very very important story. Sorry. Sydney came in at sixty five percent, very weak for that city. Melbourne was a little below that. Brisbane was just over fifty percent. Adelaide with sixty six percent sounds good, but not for that city. Act was just over it was about fifty four percent. Basically, what's happening in the market. Core inflation is holding up, and the chance of a rate cut anytime in the next six months seems slim. We kind of saw that even in fact, on Friday A and ztamp Bank of Queensland joined Westpac National Australia Bank saying the earliest there will be a rate cut is May next year. We have all this extra supply that we've been talking about, there's economic uncertainty and an ongoing cost of living crisis. Put all that together, you really do have a lid on prices. It's not all negative. Well, it's probably quite positive. If you're trying to buy your first time this is all good news, really, but for we homeowners, we think of it as negative. This still remains a housing shortage and so that'll keep a flaw on losses. So it's not as if the experts are saying we're going to end up with prices ten percent lower or anything like that. There still is this housing shortage, but just for the time being, I think that boom is over.
And of course you're talking about interest rate cuts, and politically interest rate cuts matter, don't they And if you are the prime minister, you would love an interest rate cut just heading into the election because it just it makes it look like you are the one delivering to people wanting to buy a high all that kind of thing. Prime Minister Anthony Alberanezi has indicated that the next federal election, federal election that's my preliminary clearance today, will be later rather than sooner, suggesting probably in April or a may Pole.
Right. So, Anthony Alberizi has always talked about the idea that he wants four year terms. In three years isn't long enough and he wants to run the full three years. That's the background to this. Yesterday he was speaking on the ABC's Inside His program. He said that Australians have a bit of time before going to the polls. Now an election must be held by seventeenth of May, a bit of time. Well, if you're going to call an election January February, that pushes you out till April May. At the moment, Parliament is scheduled for two weeks in February and the budget is to be delivered on the twenty fifth March. Yesterday, mister Albernizi said he intended to go ahead with those two things. You wouldn't deliver a budget, for example, if you're in the middle of an election campaign. So if they did do the twenty fifth of March, that would, let's say six weeks from that, you're really at I think the tenth of May is a Saturday. See probably the third or the tenth of May. Anyway. He was also asked about the Social media band for under sixteen year olds legislation that passed last year. Mistrail Bernizi said he's prepared to talk to anyone about the ban and its implementation, including ex owner Elon Musk. He went on to say that mister Musk had his own agenda and was entitled to push that agenda. The Prime Minister also defended Labour's handling of the economy, saying inflation and interest rates go higher earlier in other countries, whereas Australian insustrates didn't actually peak quite as high, and the inference there is though other countries are in front of us in terms of dropping rates and we're not quite there yet.
It's going to be an interesting budget, isn't it, Sean, because there will be a lot of pressure on Jim Chalmers not to deliver a budget that does increase inflation or add to inflationary pressure. But a pre election budget is typically a big spending budget, isn't.
It, Charlie. So if you come in remember last week Deloitte Access Economics said that you're going to end up with a budget deficit of thirty one billion dollars this financial year and about thirty billion dollars into the next So you come into that election cycle, you've got a budget deficit that's around that thirty billion dollars mark. There's no sign of interest rates falling. It doesn't work very well for the government indeed.
All right, let's take a look at local markets. Starting locally, where do we finish up on Friday?
The ASSEX ended flat on Friday at eighty four hundred and thirty six points. That means for the week it was up about half a percentage point. Certainly was a strong week for the ASEX. It's been quite a few days on Wall Street following last Thursday's Thanksgiving holiday. Brent crue it's trading around seventy two US dollars a barrel, goals just under twenty six sixty and out, still pretty high and always training just above one hundred US dollars a ton. The ausie dollars buying just over sixty five US cents, and Bitcoin is fetching ninety six thousan five hundred US dollars a unit.
Coming up after the show, Sean, you have an interview coming with Sam Garland, who is the Banking and Capital Markets leader at PwC Australia. This is an interesting chat.
It is. So he's put together the big four banks results, looked at where they're doing well, where they're not doing well, but where I found really interesting. We started talking about where do they find growth? Now, these banks are extremely expensive relative to other banks overseas. The Commonwealth Bank in particular on a historical perspective, is really really costly at the moment. So we start talking about how do they actually where do they find their bottom line earnings going forward? Is it in costs? Is it in revenue. It's a great chat.
Yeah, it is a good one. It's coming up after the show. We have plenty still to cover those Sean. We've got the a trible c giving the green lights, the Qatar Virgin tie up, you COVID cases across the country jumping, and we've got to talk about Donald Trump's extraordinary demand on bricks nations. That's still to come. We'll be back in a moment with the rest of the day's business news. Sean. The Competition Watchdog has given interim approval for Virgin Australia to partner with Qatar Airways, opening the way for the local carrier to start selling long haul flights.
Tickets will go on sale by Christmas, and Virgin will operate seven flights a week to Delha using katars, planes, crews and pilots. The two carriers have agreed to court enforceable undertakings to protect customers. The Competition watch dog said the benefits of the type including increased choice for passengers and about three billion dollars in economic benefits to Australia over the next five years. I love this story. More competition, lower prices. We've seen that in the domestic market. We've seen that post COVID in the international market. Now that we've got Virgin selling guitar flights out of Australia, we're going to see more competition, hopefully lower prices.
Yeah, great for travelers. Online property listings group ARIA has sued its main rival, Domain, accusing it of infringing on its copyright over property photos and floor plans displayed on its website.
Aria, owner of real estate dot com dot au, has alleged in the Federal Court that Domain breached copyright by scraping exclusive listings and placing them on Domain's price Finder and Insight business platforms, according to the fin Review, but Domain, which is defending the claim, argues that Aria's lawsuit is a bid to exert uncompetitive market influence. As the biggest classifieds company nationally. Aria is backed by News Court, while Domain is six percent owned by nine Entertainment. Aria is ledging it owns the copyright for images and schematics for those one hundred and eighty one listings obtained by Domain and used by its analytics service. Ria claims it had exclusivity rights third by photographers for the relevant images.
Sean, we mentioned this one before. There's been a significant jump in COVID nineteen hospitalizations and infections across the country, and health authorities are urging caution ahead of Christmas festivities. It's been a while, isn't it since we've heard a warning like this, But it takes us straight back to kind of twenty twenty, twenty twenty one. Those days.
Well, the way I saw this story not that long ago, the warnings about Christmas parties weren't about COVID. It was about behavior. Nowadays it's all about COVID.
See, hey, if you just keep your distance, socialist, that's right. It kind of takes out a lot of other challenges as well.
That's true. So the number of people hospitalized with the virus in Victoria increased by nearly sixty percent between October and November. The state's latest COVID nineteen surveillance report says the number of cases notified to the top department has also increased by forty four percent in the past month. According to AAP, COVID nineteen infections have increased in Western Australia three months of relatively low and stable figures. According to the WA Health Department data, now, New South Wales and Queensland have experienced slight increases to reported infections, but their overall numbers of COVID nineteen cases remain low. The Federal Department of Health and Aged Care vaccination rates were down for all states and territories in the November reporting period. That's a concern because obviously over Christmas, when people get together and families get together, you're more likely to be at risk.
So on turning to international news now, and Donald Trump has demanded that bricks Nations now bricks is a has a block of countries and it was originally wasn't it Brazil, Russia, India, China and South Africa, But it's expanded since then, hasn't it it has expanded to include kind of Iran and Egypt and Ethiopia and the UAE, which completely just destroys the bricks kind of initialism.
It does, I mean bricks I EA doesn't work.
It certainly doesn't. There's too many vowels now. And so he's demanding that they not create a currency to replace the US dollar. And this is a bit that gets me, threatening to impose one hundred percent tariffs on their imports if they try so.
The Group of Emerging Economies has a stated purpose of building up an international finance system that is less dependent on the US and the European Union. Fair enough Brazil, Russia, India, China, South Africa, huge populations, so fair enough that I won't have to be so reliant on the US and European Union. The US dollar is the overwhelming currency of choice for international trade, but bricks nations, particularly Russia, have been pushing to find an alternate. Mister Trump's threat against the bricks nations come as part of a flurry of trade related demands issued by the incoming president from his truth social media Accunnida the past couple of days. He also dined with Canadian President Justin Trudeau over the weekend. He said that mister Trudeau had committed to working to address legal border crossings and funtional smuggling. That's a condition of the US not imposing twenty five percent tariffs on Canada. It is just ridiculous. Two weeks ago he was talking about ten percent tariffs on China. No, he's talking about one hundred percent tariffs on China. If they do something. It must be very hard to be an international diplomat to know what to take seriously and what not to take seriously.
I wouldn't even know where to start. One of the big winners from the election of Donald Trump in the US looks like being Rupert Murdoch's Fox News.
Interesting this It's captured nearly three quarters of all US cable news audiences in the aftermath of Donald Trump's victory, as liberal Americans tune out of the former reality stars transition to a second term in office. This really hit a nerve with me, because when you go out, people no longer want to talk about Donald Trump. And I'm always following Donald Trump for work, but I actually don't want to talk about Donald Trump, and people don't want to talk about Donald Trump now. Obviously, winners are grinners, so Fox viewers love it. Fox's daily audience audiences have surged forty percent since the November five vote, while viewership of the more left leaning MSNBC CNN they've dropped by about or somewhere between thirty twenty seven and thirty eight percent. According to Nielsen figures, Fox News averaged two million viewers a day from November six to twenty twenty two. That's up from one point four million previously during primetime evening hours. Since the election, seventy three percent of the title cable news audience is watching Fox, just sixteen percent, MSNBC eleven percent CNN. Winners are definitely grinners, Michael.
It does seem that way now. Rebel forces have swept into Syria's second city, Aleppo, and we're rapidly advancing south after mounting a lightning offensive that poses the biggest threatned years to Bashar al Assad's regime.
The Syrian Army said that the rebels had been able to enter wider areas of a Epo city, but were unable to secure strongholds because of continued powerful and targeted strikes by our armed force. According to the ft It added that it was preparing for a counter attack and that its forces had engaged in fierce battles in an area spanning one hundred kilometers in recent days. Now the assault comes as Assad faces growing domestic and external pressure in a country absolutely shattered by civil war it began in twenty eleven with the popular uprising. Assad was able to quash the original rebellion with military backing from Russia, Iran and Iranian back groups such as Hesblah. The fighting, though in serious civil war has I mean, it's largely diminished in recent years, with the remnants of the armed opposition pushed north towards Turkey. But over the past year, Israel of course has stepped up its air strikes on Iranian affiliated targets in Syria. It's also launched and offensive against Hesbala in Lebanon. Hence Alasad's supporters have been damaged or weakened, and so rebels are now taking advantage of that and creating trouble in Syria.
Extraordinary times on the global stage, Sean. Now up next is the Fear and Greed Daily Interview. Sam Garland, Banking and Capital Markets leader at PwC Australia. Before that, though, we have Fear and Greed's resident economist Stephen Cook coolis with Fear and Greed the week ahead. What's he covering this week, Sean, It's.
A massive week. We've got economic growth figures out this week for the September quarter. That's like the biggest kind of data drop of the quarter. So you imagine the kook.
He's all over it. Yeah, he hasn't slept for a week in preparation.
And he won't sleep for the next week.
He's very, very excited. That's coming up next, followed by the interview with Sam Garland. A couple of good pieces of listening on the Fear and Greed playlist on your podcast platform or at Fearangreed dot com dot au. Thank you very much, Sean, Thank you.
Michael.
It is Monday, the two of December twenty twenty four. Make sure you following the podcast and please join us online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael Thompson and that was Fear and Greed. Have a great day.