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WA tops economic rankings again, but QLD closing in 🏎️🏁
Western Australia has retained its title as Australia’s best-performing economy for the second consecutive quarter in CommSec’s latest State of the States report.
The report ranks states and territories based on eight key economic indicators, comparing current data to long-term averages. WA claimed top spot on five indicators, including retail spending, unemployment, population growth, housing finance and dwelling starts.
Queensland surged from third to equal second alongside South Australia, with both states showing strong economic momentum. Victoria held steady in fourth place, while Tasmania remained in fifth.
NSW moved up to sixth, overtaking the ACT, which slipped to seventh. The Northern Territory remains in eighth.
CommSec chief economist Ryan Felsman said that while higher interest rates and inflation have slowed economic activity, strong job markets and population growth are keeping state economies resilient.
“As consumers respond to higher borrowing costs and price pressures, the future path will depend on whether the job market can hold up as well as the trajectory of interest rates over the coming months,” he said.
#economy #jobs #property #realestateaccountants
Inflation falls, boosting rate cut hopes 🤞🤞
Australia’s inflation rate has fallen to its lowest level in three years, increasing the chance of an interest rate cut in February.
The Australian Bureau of Statistics (ABS) reported that underlying annual inflation – the Reserve Bank’s preferred measure which strips out volatile price movements – eased from 3.5% in the September quarter to 3.2% in the December quarter.
Meanwhile, headline inflation dropped to 2.4% annually, down from 2.8% in the September quarter and well below its 7.8% peak two years ago.
The ABS said lower electricity and fuel prices, along with slowing new dwelling costs, helped drive inflation down. Electricity prices fell 9.9% in the December quarter, following a 17% decline in September, thanks largely to government rebates.
New dwelling prices also dropped for the first time since mid-2021, as builders offered discounts to attract buyers.
#property #realestate #interestrates #inflation #realestateaccountants
Equities vs housing: which offers a better return? 🤔🪴⌛
You might be wondering whether housing or equities offer a better return.
According to CoreLogic’s January 2025 Housing Chart Pack, Australia’s properties are worth $11.1 trillion – far outstripping the combined value of the stock market ($3.3 trillion) and superannuation funds ($4.1 trillion).
However, while residential real estate remains the nation’s largest asset class, its performance slowed in 2024. Total returns, which include both capital gains and rental income, reached 8.3% for property last year, falling short of the 11.4% return delivered by equities.
That said, investing is a long-term game.
CoreLogic economist Kaytlin Ezzy said that, while property underperformed in 2024, it has delivered superior returns in six of the past ten years. Over the past decade, housing has provided cumulative total returns of 132.6%, slightly ahead of equities at 126.4%.
"Whether it's housing or equities, it's normal to see some market volatility and both booms and busts are part of the usual asset pricing cycle. Regardless of asset type, time on the market has beat timing the market," she said.
So, which is better?
Well, it depends on your goals. Property offers stability and tangible assets, while equities tend to provide higher liquidity and quicker growth potential but are more volatile. For long-term wealth-building, both can play a valuable role in a diversified portfolio.
LMS Takeaway - Why not all of the above! Our clients update their strategies as circumstances change, but there is a time and a place for all manner of investments. Getting started and investing is the most important part. Contact us today if you dont have a clear action plan for 2025
#property #realestate #investing #equities #realestateaccountants
Household saving increases as tax cuts boost income 📈😊
The household saving ratio climbed to 3.2% in the September quarter, up from 2.4% in the June quarter, according to the latest Australian Bureau of Statistics data.
This increase happened because household incomes grew faster than spending.
Total disposable income went up by 1.5%, helped by higher wages and lower taxes. Employee earnings increased by 1.3%, while a 3.8% drop in income tax – thanks to the Stage 3 tax cuts introduced on 1 July 2024 – gave households more money to save.
Although the saving ratio remains below the long-term average of 5.0%, this uptick could signal a turning point. With more money in their pockets, households might find it easier to save in the coming months – particularly if inflation continues to ease.
Question: Are you finding it easier to save? Or are you being smarter about your spending ?
Let us know in the comments
#economy #money #taxation #realestateaccountants
Rental market stabilises as growth slows 🏡⚖️🏡
Australia’s rental market has passed its peak, with rents recording their slowest annual growth in four years, according to CoreLogic’s Quarterly Rental Review.
National rents rose 4.8% in 2024, down from 8.1% in 2023, with the December quarter showing just a 0.4% increase – the smallest fourth-quarter rise since 2018.
CoreLogic economist Kaytlin Ezzy said rental affordability was a key factor for the slowdown, with median rents now absorbing 33% of annual pre-tax household income – the highest level since 2006. Since the onset of Covid, rents have risen 36.1%, adding $171 per week to median rents.
These pressures have prompted some renters to delay moving out or form larger share households to manage costs, reversing the trend of shrinking household sizes seen during Covid.
Beyond affordability, Ms Ezzy said improved supply and easing demand also contributed to a more stabilised rental market.
"On the demand side, the easing in net overseas migration was also a factor contributing to softer rental demand, with net overseas migration levels expected to normalise around pre-Covid decade averages by the 26/27 financial year,” she said.
"While on the supply side, the annual value of new investor lending increased by 26.3% over the year to September 2024, increase in investor participation above levels, suggesting a potential net increase in rental stock.
#property #realestate #rental #realestateaccountants
