Latest / She's On The Money / Quarterly Market Update

Transcript

Quarterly Market Update · She's On The Money

• 0:00
  Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud Yr
• 0:04
  Speaker 1: the Order Kerni Whalbury and a waddery woman. And before
• 0:08
  Speaker 1: we get started on She's on the Money podcast, I
• 0:11
  Speaker 1: would like to acknowledge the traditional custodians of the land
• 0:14
  Speaker 1: of which this podcast is recorded on a wondery country,
• 0:18
  Speaker 1: acknowledging the elders, the ancestors and the next generation coming
• 0:22
  Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
• 0:27
  Speaker 1: and the storytelling of you to make a difference for
• 0:30
  Speaker 1: today and lasting impact for tomorrow.
• 0:33
  Speaker 2: Let's get into it.
• 0:34
  Speaker 3: She's on the Money, She's on the Money.
• 0:57
  Speaker 4: Hello, and welcome to She's on the Money, the podcast
• 0:59
  Speaker 4: for annuals who want financial freedom. Welcome to the first
• 1:03
  Speaker 4: quarter for the new financial year and our quarterly market update.
• 1:07
  Speaker 2: That's very exciting for me, very exciting.
• 1:09
  Speaker 4: I want to obviously know a few things fee, but
• 1:12
  Speaker 4: I just really want to get this kind of right
• 1:15
  Speaker 4: because in my mind, there's a first quarter of the year. Yeah,
• 1:17
  Speaker 4: and there's the first quarter of the financial.
• 1:19
  Speaker 2: New financial year. So if you are like me and
• 1:22
  Speaker 2: you only recognize financial years instead of real years, you
• 1:26
  Speaker 2: would say that this is the first quarter, and a
• 1:28
  Speaker 2: quarter is three months of the new financial year, because
• 1:32
  Speaker 2: the end of financial year is June thirty, and so
• 1:34
  Speaker 2: new financial year starts on the first of July. Happy
• 1:37
  Speaker 2: New Year, Thank you, new year, new me. I have
• 1:40
  Speaker 2: no resolutions. That's okay, you get what you get.
• 1:42
  Speaker 4: It's your already goals.
• 1:44
  Speaker 2: No, because I've come to the very sad realization that
• 1:48
  Speaker 2: I never stick to all them. That's also yes, like
• 1:50
  Speaker 2: why mother, but onwards and upwards. Most people would celebrate
• 1:54
  Speaker 2: the new year on the first of January, but we
• 1:57
  Speaker 2: have a calendar year and a financial year, and today
• 2:00
  Speaker 2: we're talking financial years, so you are corrected. Is the
• 2:02
  Speaker 2: first quarter of the new financial year. And as you
• 2:06
  Speaker 2: said off air, you're physically present but not mentally present
• 2:08
  Speaker 2: for this episode. Is that right?
• 2:10
  Speaker 3: Oh?
• 2:10
  Speaker 2: Yeah?
• 2:10
  Speaker 4: I should preface it by saying, I am really going
• 2:13
  Speaker 4: to struggle with this one, because I f.
• 2:15
  Speaker 2: You're like, this looks boral.
• 2:16
  Speaker 4: Yeah, I can already feel a lot of numbers coming
• 2:19
  Speaker 4: my way, and you know how I get with numbers.
• 2:21
  Speaker 2: You know, And you know what, I think it's an
• 2:23
  Speaker 2: exciting episode. Let me try and reframe it for you.
• 2:25
  Speaker 2: Quarterly market update does sound bland? It sounds like some
• 2:29
  Speaker 2: financial newsletter that you'd click delete on immediately. But I
• 2:33
  Speaker 2: promise I'll try and make it as interesting as possible,
• 2:35
  Speaker 2: because it's actually in our best interests to be aware
• 2:38
  Speaker 2: of what has happened in the financial markets. So I'll
• 2:41
  Speaker 2: try and explain it in as simpler terms but also
• 2:44
  Speaker 2: as engaging a terms as possible, because I want you
• 2:48
  Speaker 2: to understand what's going on with the economy. Why the
• 2:50
  Speaker 2: heck is inflation still so high? What does it mean
• 2:53
  Speaker 2: when we're talking about cost of living? Like how do
• 2:55
  Speaker 2: these things actually happen in our market? So that you
• 2:59
  Speaker 2: sound really education a brunch next week?
• 3:01
  Speaker 4: Whoa, I've better book a brunch for two?
• 3:04
  Speaker 2: We can if I should be so lucky.
• 3:07
  Speaker 4: So I just I guess, like taking a look at
• 3:09
  Speaker 4: the whole year, it has been rough, cost of living,
• 3:11
  Speaker 4: all these things. Are we kind of coming into this
• 3:14
  Speaker 4: new financial year with a financial hangover? Or are we
• 3:16
  Speaker 4: refreshed and kind of like ready to go?
• 3:19
  Speaker 2: You know? I feel like we all have a financial
• 3:20
  Speaker 2: hangover right Like I'm seeing it in the industry, I'm
• 3:23
  Speaker 2: seeing it on social media as well. I think we're
• 3:25
  Speaker 2: just frustrated financially, and it's so fair given the current
• 3:29
  Speaker 2: state of the world. So maybe Beck, we are a
• 3:32
  Speaker 2: little bit hungover, maybe a little bit sluggish. Maybe it's
• 3:35
  Speaker 2: like day two hangover, you know when they linger, oh yeah,
• 3:39
  Speaker 2: one out of ten. But the global economy is still recovering,
• 3:42
  Speaker 2: but inflation seems to be lingering. I'd say at home,
• 3:46
  Speaker 2: inflation continues to move down towards the target, but the
• 3:50
  Speaker 2: progress is slower than expected. So I feel like a
• 3:53
  Speaker 2: weatherman explaining this to you. I'm like, but the progress
• 3:56
  Speaker 2: is slower than expected, like the rain is like moving
• 3:59
  Speaker 2: or something. But it's true, right, We're all hoping that
• 4:02
  Speaker 2: inflation goes down at a quicker rate. And at the
• 4:05
  Speaker 2: very start of this year, economists said, oh my gosh,
• 4:07
  Speaker 2: it's going to fall down, and it hasn't been. It's
• 4:10
  Speaker 2: definitely been going in the right direction, but it's taking
• 4:13
  Speaker 2: a lot longer. And then the domestic outlook, so Australia's
• 4:16
  Speaker 2: outlook remains positive, but economic activity in Australia does continue
• 4:21
  Speaker 2: to weaken as the years progress. So with GDP growth
• 4:25
  Speaker 2: during the December quarter so twenty twenty three slowing down
• 4:29
  Speaker 2: to zero point two percent from zero point three percent
• 4:33
  Speaker 2: in the preceding quarter, so that just means that things
• 4:37
  Speaker 2: are slowly slowing down over time. So we know that
• 4:41
  Speaker 2: inflation is going down and that's good, but it also
• 4:44
  Speaker 2: means that we're exporting less, so we're sending less products
• 4:48
  Speaker 2: out of Australia, which means our profit overall for what
• 4:53
  Speaker 2: the country is making from exporting stuff is going down.
• 4:57
  Speaker 4: And that is good for us.
• 5:00
  Speaker 2: It's not good for us, it's good for it. We
• 5:01
  Speaker 2: want to have high levels of export. We want our
• 5:04
  Speaker 2: country to be making a lot of money. So while
• 5:07
  Speaker 2: you're not personally profiting off that, if our services and
• 5:11
  Speaker 2: the goods and services that we sell as Australians are
• 5:14
  Speaker 2: high and doing really well, our economy is usually reflective
• 5:17
  Speaker 2: of that. However, if our economy is going down and
• 5:21
  Speaker 2: there's less being shipped out, there's less money coming into
• 5:23
  Speaker 2: the country.
• 5:24
  Speaker 4: Okay, when you're saying that the December quarter twenty twenty
• 5:29
  Speaker 4: three is slowing down to zero point two percent from
• 5:31
  Speaker 4: zero point three percent in the preceding quarter, is that
• 5:34
  Speaker 4: saying that basically, like right now, the price or everything,
• 5:38
  Speaker 4: the cost of living kind of like is still kind
• 5:41
  Speaker 4: of going up, but not as high as it once was.
• 5:45
  Speaker 2: It's not that related. So it means that economic activity
• 5:49
  Speaker 2: has weakened, so things that are being sold outside of
• 5:53
  Speaker 2: Australia are not as popular right now. But inflation is
• 5:58
  Speaker 2: sort of linked to that, but not not super strongly.
• 6:01
  Speaker 2: Sure so a little bit but not really.
• 6:03
  Speaker 4: Okay, and we hopefully will see this kind of change.
• 6:07
  Speaker 2: Hopefully we want to see it increase, like we want
• 6:09
  Speaker 2: lots of cash o lut coming into Australia from the
• 6:12
  Speaker 2: stuff that our local community produces.
• 6:15
  Speaker 4: Okay, I see, Okay, it's good to know. That's very
• 6:19
  Speaker 4: good to know. I mean, it doesn't look great right now, but.
• 6:21
  Speaker 2: No, it doesn't look great. And I know that the
• 6:23
  Speaker 2: difference probably in people's heads of zero point two percent
• 6:26
  Speaker 2: from zero point three percent seems really small. But we're
• 6:30
  Speaker 2: talking about the entire economy, so for that market to change,
• 6:34
  Speaker 2: there has been a definite difference between what is being exported.
• 6:38
  Speaker 2: Does that make sense? So like zero point two percent
• 6:40
  Speaker 2: doesn't sound like a whole heap, but it's actually a
• 6:43
  Speaker 2: difference that we need to be aware of.
• 6:45
  Speaker 4: Okay, Now, just kind of shifting gears a little bit. Today,
• 6:50
  Speaker 4: will obviously be talking about like wages and employment and
• 6:53
  Speaker 4: spending and saving as well, which is something that I
• 6:56
  Speaker 4: really struggle with.
• 6:57
  Speaker 2: But we're going to get on that. I think you
• 6:59
  Speaker 2: and I we're going to do a bex budget breakdown.
• 7:02
  Speaker 4: I would really really like that we're going to.
• 7:04
  Speaker 2: I think we're going to do it at that brunch
• 7:05
  Speaker 2: you promised me before.
• 7:07
  Speaker 4: That's right, Yes, the brunch we're going to this weekend.
• 7:10
  Speaker 4: So let's start off by looking at what's happening with
• 7:13
  Speaker 4: inflation and interest rates?
• 7:15
  Speaker 2: All right, very sexy. I like this, and I feel
• 7:17
  Speaker 2: like people are going to be more interested in wages
• 7:20
  Speaker 2: and employment and spending and saving the RGDP, so I'm
• 7:23
  Speaker 2: glad we said going away from that at the end
• 7:26
  Speaker 2: of June. A key measure for inflation actually jumped, so
• 7:29
  Speaker 2: it climbed to four percent in May, after edging up
• 7:33
  Speaker 2: from a recent low of three point four in February.
• 7:37
  Speaker 2: The Bureau of Statistics, so the ABS monthly Consumer Price Indicator,
• 7:42
  Speaker 2: produced an annual inflation rate of three point six back
• 7:45
  Speaker 2: in April, which is very sexy because I think you
• 7:48
  Speaker 2: would remembered that last year it was up past seven disgusting.
• 7:52
  Speaker 2: This was the same as the longer established Bureau of
• 7:55
  Speaker 2: Statistics quarterly measure, which produced three point six in March.
• 8:00
  Speaker 2: So that's good, she's consistent. We love to see it.
• 8:03
  Speaker 2: But the question is, what's the RBA actually going to
• 8:06
  Speaker 2: do with interest rates? If you've got a mortgage, you're
• 8:08
  Speaker 2: thinking the that's going to happen with my mortgage? Well,
• 8:12
  Speaker 2: the Westpac Banking Corp Economics team has been one of
• 8:14
  Speaker 2: the most accurate interest rate predictors in recent times, so
• 8:18
  Speaker 2: personally I have been looking towards them each time we
• 8:22
  Speaker 2: have this conversation, and they were not surprised by the
• 8:25
  Speaker 2: inflation rate coming and hot, and they have said that
• 8:28
  Speaker 2: they are still holding firm with their predictions for an
• 8:31
  Speaker 2: interest rate cut at the November RBA meeting, So that
• 8:36
  Speaker 2: is good to know. The caveat, though, is that the
• 8:39
  Speaker 2: decisions are based on available data, and we need to
• 8:43
  Speaker 2: remember that past performance is not a reliable predictor of
• 8:45
  Speaker 2: future performance, and if the data for this quarter gets ugly,
• 8:50
  Speaker 2: then the RBA is going to update their prediction, if
• 8:54
  Speaker 2: that makes sense. So I think the caveat here is
• 8:57
  Speaker 2: what I keep rolling off every time we talk about investment,
• 9:00
  Speaker 2: every time we talk about the markets. It's that past
• 9:02
  Speaker 2: performance is not a reliable predictor of future performance. And
• 9:06
  Speaker 2: I know that that seems like I'm trying to caveat it.
• 9:09
  Speaker 2: But you can't guarantee what's going to happen in the
• 9:11
  Speaker 2: future just because you've seen some stuff in the past.
• 9:14
  Speaker 4: Yeah, for sure.
• 9:15
  Speaker 2: It's like investment, it's like spending, it's like saving. We
• 9:18
  Speaker 2: know that historically, we can see what happens after a
• 9:21
  Speaker 2: global financial crisis. We can see what happens to an
• 9:24
  Speaker 2: economy who is in distress. However, we cannot predict how
• 9:28
  Speaker 2: in a different economy because everything has changed that will
• 9:32
  Speaker 2: impact us long term. So we can only guess, and
• 9:34
  Speaker 2: I think that they are very very educated guesses, And
• 9:37
  Speaker 2: as I said before, Westpac has been I would say,
• 9:40
  Speaker 2: the most bang on. So that's why I'm relying on
• 9:43
  Speaker 2: their data at this point. But as things stand back,
• 9:48
  Speaker 2: Westpac has forecast the following from the RBA for interest rates.
• 9:52
  Speaker 2: From four point three percent today, they're saying that potentially
• 9:56
  Speaker 2: in November it will drop down to four point one percent,
• 9:59
  Speaker 2: which is very sexy. Then March next year it will
• 10:02
  Speaker 2: drop down to three point eight five percent, June will
• 10:05
  Speaker 2: drop down to three point six percent. September we're in
• 10:08
  Speaker 2: twenty twenty five, still three point three five and then
• 10:12
  Speaker 2: December next year, right in time for Christmas, will be
• 10:15
  Speaker 2: three point one percent. So that seems it just seems
• 10:19
  Speaker 2: a lot more palatable than what we have been dealing with.
• 10:21
  Speaker 4: Yes, and this I'm guessing is more so for people
• 10:24
  Speaker 4: with mortgages and things like that.
• 10:25
  Speaker 2: Yeah, it's also important for your savings because we know
• 10:29
  Speaker 2: that every time someone's interest rate increases on their mortgage,
• 10:33
  Speaker 2: which at the moment, this is really relevant for you actually,
• 10:35
  Speaker 2: because we know you don't have a mortgage, so you're
• 10:37
  Speaker 2: watching all these people with mortgages increasing and you're probably
• 10:41
  Speaker 2: going not miss her a little bit, and that's really
• 10:46
  Speaker 2: exciting for you because you're not experiencing that. But what
• 10:49
  Speaker 2: this means is that you should basically be thinking about
• 10:53
  Speaker 2: seizing the opportunity on the savings account right because usually
• 10:57
  Speaker 2: the interest rate that is being charged on mortgage is
• 11:00
  Speaker 2: often reflective of what you can make in a savings account.
• 11:04
  Speaker 2: So if you haven't reviewed your high interest savings account recently,
• 11:09
  Speaker 2: because historically and if you listen to old episodes of
• 11:11
  Speaker 2: this podcast, I'm like, like, it's not even worth it.
• 11:15
  Speaker 2: You won't even make like two percent on a savings account.
• 11:18
  Speaker 2: And also, we do need to remember that you will
• 11:20
  Speaker 2: be paying tax on any amount of money that you make,
• 11:23
  Speaker 2: even if it is the interest rate on your savings account.
• 11:26
  Speaker 2: Tax time comes, you'll be paying tax on that. So
• 11:29
  Speaker 2: like making two percent on a savings account, you're like, oh,
• 11:31
  Speaker 2: that's the point, like right, you know, even if I've
• 11:34
  Speaker 2: got two grand of savings, like sometimes you're just like
• 11:37
  Speaker 2: literally not worth my time to even consider swapping and changing.
• 11:41
  Speaker 2: But now interest rates are high, which means your savings
• 11:45
  Speaker 2: accounts could also be high. So now's a good time
• 11:48
  Speaker 2: to check if your money is making money.
• 11:50
  Speaker 4: Gotcha.
• 11:51
  Speaker 2: So for you, Beck, if you've got any savings, now
• 11:54
  Speaker 2: would be the time to go, hmmm, is it working
• 11:56
  Speaker 2: or is it just sitting there being a little bit lazy?
• 11:59
  Speaker 4: Sure? Okay, well that takes me to my next question.
• 12:03
  Speaker 4: So I guess for people with mortgages, it's kind of
• 12:05
  Speaker 4: like you're spending more on your mortgage, and then for
• 12:08
  Speaker 4: people like me who don't have a mortgage, I'm hopefully
• 12:11
  Speaker 4: saving a little bit more. But in general, how a
• 12:14
  Speaker 4: households spending their money?
• 12:17
  Speaker 2: I would like to answer that question in zero point
• 12:19
  Speaker 2: two seconds, because I think I also need to address yes,
• 12:22
  Speaker 2: you'll be saving your money but Beck, I think you
• 12:24
  Speaker 2: and I can both agree that any additional money you
• 12:27
  Speaker 2: had to save has been going towards your grocery bill,
• 12:29
  Speaker 2: or your electricity or your housing. So like, don't for
• 12:33
  Speaker 2: one second think that I don't comprehend that life is
• 12:38
  Speaker 2: a bit tougher now. It's very sexy to have savings,
• 12:40
  Speaker 2: and if you're in that very fortunate situation to have savings, like,
• 12:45
  Speaker 2: I'm very proud of you, but I also don't want
• 12:48
  Speaker 2: people to think, oh, V said that you should be
• 12:50
  Speaker 2: saving right now, because that's actually not feasible for most
• 12:53
  Speaker 2: people in our community. Like life is tough right now,
• 12:57
  Speaker 2: everything is so expensive. But I think that what we
• 13:00
  Speaker 2: want to do with stuff like this is do a
• 13:02
  Speaker 2: market update so that we understand where we are right now,
• 13:05
  Speaker 2: because it is kind of doomy and gloomy at the moment,
• 13:07
  Speaker 2: Like mortgages are crippling people. We are looking at our
• 13:10
  Speaker 2: savings accounts start to dwindle because we didn't realize that,
• 13:14
  Speaker 2: you know, for our electricity bill, which we all know
• 13:16
  Speaker 2: is probably coming up really soon because we've just started
• 13:19
  Speaker 2: to crack into winter properly, we know it's going to
• 13:22
  Speaker 2: be higher, so you might have to dip into savings
• 13:24
  Speaker 2: for that, and that, let's be honest, sucks, Like, I'm
• 13:28
  Speaker 2: so happy that you have access to savings. I'm so
• 13:30
  Speaker 2: happy that he is there. But there is a light
• 13:33
  Speaker 2: at the end of the tunnel, and I think that
• 13:35
  Speaker 2: when in doubt, and I say this all the time,
• 13:37
  Speaker 2: zoom out and we can look at the bigger picture, Like,
• 13:41
  Speaker 2: how can we support long term wealth creation for me
• 13:44
  Speaker 2: while still, you know, being a little bit pissed off
• 13:47
  Speaker 2: about groceries?
• 13:48
  Speaker 4: Yeah?
• 13:48
  Speaker 2: Like side note, now's the time to check in on
• 13:51
  Speaker 2: your superannuation to make sure that that is still making money, because,
• 13:54
  Speaker 2: like Beck, I'm pretty sure most of our community couldn't
• 13:57
  Speaker 2: contribute more to their savings or investment right now. But
• 14:00
  Speaker 2: let's just make sure that our savings and investments are
• 14:03
  Speaker 2: working hard for us while we aren't contributing to them,
• 14:06
  Speaker 2: so that we aren't falling even further behind. Like, how
• 14:09
  Speaker 2: do we create a light at the end of the
• 14:11
  Speaker 2: tunnel so that we aren't feeling so bogged down? Does
• 14:14
  Speaker 2: that make sense? Yeah?
• 14:15
  Speaker 4: Definitely.
• 14:16
  Speaker 2: But back to your question, I'm sorry, I just felt
• 14:18
  Speaker 2: like that was really necessary. You asked me how households
• 14:21
  Speaker 2: are spending their money, and boy, let's talk about it.
• 14:25
  Speaker 2: So retail trade in March fell byzero point four percent
• 14:28
  Speaker 2: over the month after the increases in January and February,
• 14:32
  Speaker 2: and that's pretty normal. So we often see increases in
• 14:35
  Speaker 2: spending in January and February because post Christmas New Year
• 14:39
  Speaker 2: knew me, lots of people are feeling really optimistic, and
• 14:42
  Speaker 2: when you're optimistic, you often are a little bit tap happy.
• 14:45
  Speaker 2: But consumers pulled back on spending due to high costs
• 14:49
  Speaker 2: of living. This tailor's swift effect on spending in February
• 14:54
  Speaker 2: has proved to be temporary. So do you remember when
• 14:57
  Speaker 2: people coming out being like Tulu Swift's booming our me?
• 15:00
  Speaker 2: I like wrote a whole piece for the Age and
• 15:02
  Speaker 2: the City Morning Herald about it, and the mediocre middle
• 15:05
  Speaker 2: aged white man came for me, of course, and I
• 15:08
  Speaker 2: was like, I know, it was a really good piece.
• 15:11
  Speaker 2: You like read it and Craigs like, Victoria, this is
• 15:12
  Speaker 2: the worst piece of writing I've ever seen in my life,
• 15:15
  Speaker 2: and I go, thank you so much for the positive feedback.
• 15:17
  Speaker 2: But household final consumption expenditure in quarter four twenty twenty three,
• 15:22
  Speaker 2: so the last three months of last year rose a
• 15:25
  Speaker 2: little by point one percent over the quarter, following a
• 15:29
  Speaker 2: slight reduction of point two percent which was revised in
• 15:33
  Speaker 2: quarter three. So I know that these things don't seem
• 15:37
  Speaker 2: really big because I think in the grand scheme of things,
• 15:41
  Speaker 2: most people aren't used to talking in point one percent,
• 15:44
  Speaker 2: because if I said, Beck, your salary is increasing by
• 15:47
  Speaker 2: point one percent, you'd be like, WEO do do?
• 15:50
  Speaker 4: I'm like, oh, that's one dollar.
• 15:51
  Speaker 2: A ye, it's not even one dollary like means nothing
• 15:55
  Speaker 2: like it's actually so menial to you. But what we
• 15:58
  Speaker 2: need to remember is these point one and point two
• 16:01
  Speaker 2: percent changes, because they're on the grand scheme of millions
• 16:06
  Speaker 2: and millions of people here in Australia, they are actually
• 16:09
  Speaker 2: impactful and they are actually reflective of how our economy
• 16:12
  Speaker 2: is working. So you might go, that's not much of
• 16:15
  Speaker 2: a difference from point one to point two, but it
• 16:16
  Speaker 2: actually is in the grand scheme of things. So the
• 16:19
  Speaker 2: other things I wanted to point out rises in spending.
• 16:23
  Speaker 2: So across Australian households, we saw that electricity, gas and
• 16:27
  Speaker 2: other fuel, the price of that and the amount that
• 16:30
  Speaker 2: we were spending on that increased by six point nine percent.
• 16:34
  Speaker 2: You know how I said point one percent was impactful
• 16:37
  Speaker 2: six point nine percent cool kind of like not shocked, no,
• 16:40
  Speaker 2: because we're experiencing it right.
• 16:42
  Speaker 4: Yeah, Like it feels it's just so much.
• 16:45
  Speaker 2: Petrol's more expensive, our electricity bills, you know they're coming in.
• 16:49
  Speaker 2: I know that you've got housemates. You're probably going, oh,
• 16:52
  Speaker 2: I'll budget you know, fifty bucks for that next month,
• 16:54
  Speaker 2: and then it comes in and you split it and
• 16:55
  Speaker 2: you're like, oh, it's like ninety to what Like I
• 16:57
  Speaker 2: didn't see this coming ye, And I think that that's true.
• 17:00
  Speaker 2: Even gas is more expensive. I was doing a bit
• 17:03
  Speaker 2: of budgeting over the weekend because our house has gas heating,
• 17:06
  Speaker 2: and I was looking at it because our gas heater
• 17:08
  Speaker 2: is broken at the moment, and I was trying to
• 17:10
  Speaker 2: work out do we just install another one or do
• 17:13
  Speaker 2: I swap to like an electric one, because you know,
• 17:16
  Speaker 2: everything is quite expensive. The gas, I feel like, is exorbitant,
• 17:20
  Speaker 2: Like it's it's crazy at the moment.
• 17:22
  Speaker 4: It used to be the cheaper one too.
• 17:24
  Speaker 1: Yeah.
• 17:24
  Speaker 2: Yeah, Like remember anyway, rent and other dwelling services that rose,
• 17:29
  Speaker 2: and I want to say only by that rose, only
• 17:32
  Speaker 2: by zero point four percent. But I feel like we're
• 17:36
  Speaker 2: all feeling that a little bit harsher than it actually yet,
• 17:39
  Speaker 2: like point four percent. Like I feel like rent and
• 17:43
  Speaker 2: other dwelling services increased, not for me personally, but for
• 17:47
  Speaker 2: our community, and what I'm seeing more than your electricity bill.
• 17:51
  Speaker 2: I just feel like that feels that way. Apparently according
• 17:54
  Speaker 2: to the data, that's not true. Food increased by point
• 17:57
  Speaker 2: nine percent, health spending increased also by point nine percent,
• 18:02
  Speaker 2: and furnishing another household equipment increased by one point one percent,
• 18:07
  Speaker 2: which I just think that that's interesting. Across the board
• 18:09
  Speaker 2: we're seeing an increase, But I feel like the most
• 18:13
  Speaker 2: important thing is just to address the fact that the
• 18:15
  Speaker 2: cost of living right now is cooked beck yes, yes,
• 18:18
  Speaker 2: like just putting food on our table more expensive than
• 18:21
  Speaker 2: it was last year. And we all know that we
• 18:23
  Speaker 2: haven't had increases in our salaries to the same extent
• 18:26
  Speaker 2: that inflation has impacted us, which means ultimately your savings
• 18:31
  Speaker 2: or your ability to save if you are saving at
• 18:34
  Speaker 2: the moment, has gone backwards. And that just feels trashy.
• 18:38
  Speaker 4: As it does, and you can really feel it, like
• 18:40
  Speaker 4: it's not like super obvious, like maybe like a blow
• 18:43
  Speaker 4: for bread is a dollar more or like here and there,
• 18:45
  Speaker 4: but you know it's there. You can feel the pinch.
• 18:47
  Speaker 2: Exactly, which is why I don't think you're going to
• 18:49
  Speaker 2: be surprised by the next pieces of data I've got
• 18:51
  Speaker 2: for you. So those increases offset a fall in discretionary spending.
• 18:55
  Speaker 2: So discretionary spending is like the spending money you have
• 18:58
  Speaker 2: on the fun stuff in life, luxuries, and some of
• 19:01
  Speaker 2: the things that we saw was a step back in
• 19:04
  Speaker 2: people spending on hotels, cafes, and restaurants. Of course, that
• 19:07
  Speaker 2: went down by two point eight percent. Purchasing vehicles went
• 19:11
  Speaker 2: down by three point six percent, Clothing and footwear expenditure
• 19:15
  Speaker 2: has gone down by two point five percent, and then
• 19:18
  Speaker 2: cigarettes and tobacco has gone down by six point two percent,
• 19:22
  Speaker 2: So we know that all of those things are luxuries.
• 19:25
  Speaker 2: I mean, I'm going to be really selfish or maybe
• 19:28
  Speaker 2: inject some of my opinion where it's not needed, but
• 19:30
  Speaker 2: I'm kind of glad that people are spending less on
• 19:32
  Speaker 2: tobacco and cigarettes because I mean, that's good for their health.
• 19:35
  Speaker 2: But that is telling us that people are definitely feeling
• 19:39
  Speaker 2: the pinch, because at the end of the day, that
• 19:41
  Speaker 2: is a luxury, and you and I both know that
• 19:43
  Speaker 2: cigarettes and tobacco are so expensive in Australia now like
• 19:47
  Speaker 2: exorminantly so, so they have been something that people are
• 19:51
  Speaker 2: going can't afford this habit. I'm stepping back from it totally.
• 19:55
  Speaker 4: I do feel for those people because literally, like, as
• 19:58
  Speaker 4: you know, I've been very very very poor recently, and
• 20:01
  Speaker 4: when you're stressed about being poor, the other here can
• 20:03
  Speaker 4: buy a vape, which is I know I shouldn't be
• 20:05
  Speaker 4: like no.
• 20:06
  Speaker 2: But no, no, no, I'm not condoning it health, but for
• 20:09
  Speaker 2: you to do that, and like I'm just gonna make
• 20:11
  Speaker 2: a grand assumption here, when you purchase a vape, it's
• 20:14
  Speaker 2: got nicotine in it, right, yes, And people who purchase
• 20:17
  Speaker 2: vapes or cigarettes or tobacco have an addiction to that substance,
• 20:21
  Speaker 2: and that is absolutely fine. It is you know, your choice.
• 20:25
  Speaker 2: But to be cutting back on something that your body craves, yes,
• 20:30
  Speaker 2: means that we are impassioned financially, significantly financially.
• 20:34
  Speaker 4: The only reason I mentioned it is just to shout
• 20:37
  Speaker 4: out to all the people that are stress about money
• 20:38
  Speaker 4: and then also can't reduce their stressed by their usual
• 20:42
  Speaker 4: means exactly. That would be really trash it is, but
• 20:45
  Speaker 4: you know, I guess yeah, in a way, we're I
• 20:47
  Speaker 4: mean not in a way. We're definitely like helping our health.
• 20:50
  Speaker 2: So yeah, I know it's like a rock and a
• 20:52
  Speaker 2: hard place, And that's not me being like, you shouldn't smoke.
• 20:54
  Speaker 2: I think everybody who does knows that that's not a
• 20:57
  Speaker 2: habit that they would love to have long term, because like,
• 21:01
  Speaker 2: I understand the implications here, but for me, I think
• 21:04
  Speaker 2: that really draws attention to the fact that finances are
• 21:06
  Speaker 2: tough for a lot of people because we're now spending
• 21:09
  Speaker 2: significantly less on the things that our bodies crave and
• 21:11
  Speaker 2: during a stressful period of time, Like, isn't that what
• 21:15
  Speaker 2: you fall back on?
• 21:16
  Speaker 4: Exactly? Okay, so we're talking about spending. Are we at
• 21:20
  Speaker 4: all managing to save any money on average?
• 21:23
  Speaker 2: On average?
• 21:23
  Speaker 1: All right?
• 21:24
  Speaker 2: So when it comes to what we are saving, we've
• 21:26
  Speaker 2: actually seen an increase in gross disposable income, which was
• 21:30
  Speaker 2: driven by a rise in compensation of employees, social assistance
• 21:34
  Speaker 2: benefits and interest received, and a decline in income tax paid.
• 21:40
  Speaker 2: I feel like you will love that because you're paying less,
• 21:42
  Speaker 2: so that's kind of sexy. This has boosted the household
• 21:45
  Speaker 2: savings ratio from one point nine percent, so hystorically people
• 21:49
  Speaker 2: were able to save one point nine percent, and now
• 21:52
  Speaker 2: we're talking three point two percent, which is I think
• 21:55
  Speaker 2: very very sexy. But can we talk about that percentage
• 22:00
  Speaker 2: because I've said a million times before on the podcast,
• 22:04
  Speaker 2: I do not believe in percentage based budgets because budgeting
• 22:09
  Speaker 2: for someone who earns forty thousand dollars and going beck,
• 22:12
  Speaker 2: you should be saving ten percent, and budgeting for someone
• 22:15
  Speaker 2: who earns four hundred thousand dollars and saying, beck, you
• 22:17
  Speaker 2: should be saving ten percent is unreasonable because if you
• 22:21
  Speaker 2: earn four hundred grand, I'm telling you right now, if
• 22:23
  Speaker 2: I was still a financial advisor and I sat down
• 22:26
  Speaker 2: with you, I would be trying to take way more
• 22:27
  Speaker 2: than ten percent off you to save and invest. I'd
• 22:30
  Speaker 2: be like, all right, well, what are you spending? How
• 22:32
  Speaker 2: does this work? Like I would be trying to maximize that,
• 22:34
  Speaker 2: Like most of your income would be going to savings
• 22:37
  Speaker 2: and investments if it was up to me. But if
• 22:41
  Speaker 2: you take a single person on forty thousand dollars, saving
• 22:45
  Speaker 2: ten percent is unreasonable and unfeasible. Yes, and a lot
• 22:48
  Speaker 2: of the popular spending people in the world, so we're
• 22:52
  Speaker 2: talking not to call them out specifically, but we've got
• 22:54
  Speaker 2: like Barefoot Investor. We've got Dave Ramsey, We've got you know,
• 22:57
  Speaker 2: all of the big hitters. They have percentage based budgets,
• 23:01
  Speaker 2: which I think make you feel like trash. Like imagine,
• 23:05
  Speaker 2: And don't get me wrong, I am obsessed with the
• 23:07
  Speaker 2: Barefoot Investor because he was the one who kind of
• 23:10
  Speaker 2: championed that financial literacy rise in Australia. He's the one
• 23:15
  Speaker 2: that like really got budgets into people's household conversations. He's
• 23:20
  Speaker 2: the one that when I was back in my retail jobs,
• 23:23
  Speaker 2: I would see people tapping their cards that had written
• 23:26
  Speaker 2: in tech stuff splurge on them. Like obsessed with people
• 23:31
  Speaker 2: taking control of their financial literacy. But in an economic
• 23:34
  Speaker 2: crisis like we're in today, Beck, if you were like
• 23:37
  Speaker 2: I don't know where to go, I don't know what
• 23:38
  Speaker 2: to do, and you picked up a Barefoot Investor book
• 23:43
  Speaker 2: and saw that he expected you to save ten percent,
• 23:46
  Speaker 2: you'd be like, I can't even adhere to that, Like
• 23:48
  Speaker 2: I'm not doing well, I'm not doing the right thing.
• 23:50
  Speaker 2: I feel like trash. Don't get me wrong, I'm not
• 23:52
  Speaker 2: saying it's a bad thing. Because the Barefoot Investor has
• 23:55
  Speaker 2: changed people's budgets and people spending and people's money story
• 23:59
  Speaker 2: for the better. There are so many people in our
• 24:01
  Speaker 2: community who have benefited from him, so it's not bad.
• 24:05
  Speaker 2: But I know if someone told me I needed to
• 24:07
  Speaker 2: be saving ten percent and I couldn't, i'd feel like trash. Yes,
• 24:10
  Speaker 2: this data tells us that historically, especially over the last
• 24:15
  Speaker 2: few years, people have only been able to save one
• 24:17
  Speaker 2: point nine percent back one point nine percent. But all
• 24:21
  Speaker 2: of these budget and cash flow gurus are telling us that, oh,
• 24:24
  Speaker 2: you should be saving.
• 24:25
  Speaker 4: Ten Yes, what and then it kind of like ruins
• 24:28
  Speaker 4: your motivation if you're like makes you.
• 24:29
  Speaker 2: Feel like trash. Let's actually zoom out and look at
• 24:32
  Speaker 2: the big picture. Are people able to save Yes, some
• 24:35
  Speaker 2: of them are able to save three point two percent now,
• 24:37
  Speaker 2: and that's very sexy, but that's not what a lot
• 24:39
  Speaker 2: of people set as their goals. So I think that
• 24:41
  Speaker 2: we need to see that it is hard for everyone.
• 24:44
  Speaker 2: So in addition to that, as of the first of July,
• 24:47
  Speaker 2: the Stage three tax cuts are coming into effect, which
• 24:50
  Speaker 2: I think is very sexy. And while this isn't a
• 24:53
  Speaker 2: lot of extra cash, it will affect everyone across the board,
• 24:57
  Speaker 2: especially in that space where you are kind of scrambling
• 25:01
  Speaker 2: even to save that three point two percent. Yes, sorry,
• 25:04
  Speaker 2: tax cut's sexy.
• 25:06
  Speaker 4: Yeah, very nice. You know I love I love eofy, So.
• 25:11
  Speaker 2: You just love getting more money? I do you love
• 25:12
  Speaker 2: your tax return so that you can blow it. I'm
• 25:14
  Speaker 2: obsessed with you, like it's one of my favorite things.
• 25:17
  Speaker 2: You're like, I'm gonna get my tax return and I'm like,
• 25:19
  Speaker 2: what are you doing establishing an emergency fund and becks
• 25:21
  Speaker 2: like no vapes, Yes, many neighbors.
• 25:26
  Speaker 4: I do have a long list of things, and I
• 25:29
  Speaker 4: don't think that I at the top the top, absolutely
• 25:32
  Speaker 4: always at the top, you know what.
• 25:33
  Speaker 2: I just love that we you are so different, but like, genuinely,
• 25:37
  Speaker 2: I could not care less what you spend your money
• 25:39
  Speaker 2: on as long as I've given you the education that
• 25:41
  Speaker 2: you need to make the right decision for you. And
• 25:44
  Speaker 2: if you go, well this is my values, I'll be
• 25:46
  Speaker 2: like slate queen. I love it.
• 25:47
  Speaker 4: I really appreciate you. You always give me the information I
• 25:50
  Speaker 4: need and I do nothing with it. But one day
• 25:52
  Speaker 4: I will one day.
• 25:53
  Speaker 2: I like that you've got it. And it's funny because like,
• 25:56
  Speaker 2: let's go back to like baby Victoria. You all know
• 25:58
  Speaker 2: I got into like plus thousand dollars worth of personal
• 26:02
  Speaker 2: debt and that sucked. But I had financial literacy back then.
• 26:07
  Speaker 2: My dad was an accountant. Did I listen to him? No,
• 26:10
  Speaker 2: what would he know? Like, why would he know anything
• 26:12
  Speaker 2: about money? And here's my dad going, look, Victoria, if
• 26:15
  Speaker 2: you at the very start of your career start saving
• 26:18
  Speaker 2: ten percent, you'll never feel it. It's great advice. I
• 26:22
  Speaker 2: never did it. It's never gonna happen, dad, But it
• 26:25
  Speaker 2: took me going through significant financial trauma. Because to me,
• 26:29
  Speaker 2: that was quite traumatic. It was a really hard period
• 26:32
  Speaker 2: of my life because money is so stressful. And I
• 26:35
  Speaker 2: guess that's why I'm so passionate about what I do today.
• 26:38
  Speaker 2: I had access to that literacy and I didn't want
• 26:42
  Speaker 2: to use it. I think someone has to be ready
• 26:44
  Speaker 2: for it and at a stage in their life where
• 26:46
  Speaker 2: they want to take charge of that. Some people don't.
• 26:49
  Speaker 2: Some people are going to be listening to this podcast
• 26:50
  Speaker 2: being like that is great, Victoria. No intention of taking
• 26:54
  Speaker 2: it right now, And that's okay. We're just gifting you
• 26:56
  Speaker 2: with this information that you can use or not use.
• 26:59
  Speaker 2: I don't know.
• 27:00
  Speaker 4: And when you're ready, you'll get there.
• 27:02
  Speaker 2: When I'm still on your team, exactly where he cheering
• 27:05
  Speaker 2: you on. I just want to be friends.
• 27:06
  Speaker 4: Guys. So you mentioned before wage growth, but what like,
• 27:11
  Speaker 4: I'm not seeing it where.
• 27:12
  Speaker 2: You're not seeing it.
• 27:13
  Speaker 4: I'm not seeing it. What's happening, Who's getting that money?
• 27:15
  Speaker 4: Where are they going?
• 27:15
  Speaker 2: Who's getting the wage growth? Yeah, so wage growth in
• 27:19
  Speaker 2: both the public and private sectors. We're driven by organization
• 27:22
  Speaker 2: wide annual wage and salary reviews. So annual wages growth
• 27:27
  Speaker 2: in the private sector softened slightly to four point two
• 27:30
  Speaker 2: percent from four point three percent in the September quarter,
• 27:33
  Speaker 2: but wages in the public sector increased by four point
• 27:37
  Speaker 2: three percent throughout the year, up from three point five
• 27:40
  Speaker 2: percent in the previous quarter. So that's nice to see
• 27:43
  Speaker 2: that public roles are being paid more. We love to
• 27:46
  Speaker 2: see it. But I think this is a good reminder
• 27:49
  Speaker 2: that just because we're hearing that other people's wages grew
• 27:52
  Speaker 2: by this doesn't mean that ours would have. And this
• 27:55
  Speaker 2: is a really good time, I think to remind you
• 27:57
  Speaker 2: to advocate for yourself. If you have a spoken to
• 28:00
  Speaker 2: your boss in a while about a salary increase, now's
• 28:04
  Speaker 2: the time, you know, Beck that we have done a
• 28:06
  Speaker 2: whole heap of episodes about negotiating your salary or chatting
• 28:09
  Speaker 2: to your boss. In fact, on our website, I have
• 28:12
  Speaker 2: literally put a free script you can download it. It's
• 28:15
  Speaker 2: a PDF of how to have that conversation with your
• 28:18
  Speaker 2: boss and all of the responses that they might give you,
• 28:22
  Speaker 2: so that you can be prepared so that you can go, well, actually,
• 28:26
  Speaker 2: here's my value. Here's what I should do. Here is
• 28:29
  Speaker 2: you know the template. I've done it for you so
• 28:31
  Speaker 2: that you can negotiate your own pay rise with a
• 28:34
  Speaker 2: little bit of help in the background. You don't have
• 28:35
  Speaker 2: to tell anyone it's all good. But if you're not
• 28:39
  Speaker 2: seeing that, and I want you to see that, now's
• 28:41
  Speaker 2: the time to kind of maybe be reminded that sometimes
• 28:45
  Speaker 2: these things take a conversation, because sometimes employers get a
• 28:49
  Speaker 2: little bit lax and they're like, Beck hasn't mentioned it,
• 28:52
  Speaker 2: so I'm just gonna do anything about it.
• 28:55
  Speaker 4: Cheeky, cheeky, rude.
• 28:58
  Speaker 2: But I mean, they're a business. So if you haven't asked,
• 29:01
  Speaker 2: maybe you're really happy with your salary and we don't
• 29:03
  Speaker 2: need to address it back exactly the case, maybe not,
• 29:07
  Speaker 2: because if I've been on the same salary for more
• 29:09
  Speaker 2: than a year, I think you need to be having
• 29:11
  Speaker 2: a conversation about what that looks like.
• 29:13
  Speaker 4: Okay, well, maybe let's go to a really quick break
• 29:16
  Speaker 4: while I go and ask for a pay rise. You're
• 29:18
  Speaker 4: going to download that thing on my website first, though,
• 29:20
  Speaker 4: I might put you in my little earpiece in my
• 29:22
  Speaker 4: ear Is that okay?
• 29:23
  Speaker 2: Yeah, that's absolutely fine. I'm in fact, I'll come as
• 29:25
  Speaker 2: you're like support person to the meeting and I'll be like, right,
• 29:28
  Speaker 2: let's talk. Let's talk. What's back on? Right now? What's
• 29:31
  Speaker 2: she going to be on? Nope, she's more valuable than that.
• 29:34
  Speaker 4: Oh my god, I need you. Okay, let's go do it.
• 29:36
  Speaker 4: See you soon. Welcome back everyone. We are chatting all
• 29:43
  Speaker 4: things tax, so so exciting, so fun.
• 29:47
  Speaker 2: We've been talking tax, we've been talking market updates. We've
• 29:50
  Speaker 2: been talking about the vapes. We've been talking about bapes.
• 29:54
  Speaker 2: We've been talking about salary growth and how much people
• 29:57
  Speaker 2: are spending on hotels and restaurants. But we haven't talked
• 30:00
  Speaker 2: about unemployment.
• 30:01
  Speaker 4: Back true, So what do we know about how many
• 30:04
  Speaker 4: people are in employment?
• 30:06
  Speaker 2: Okay? So the unemployment rate increased slightly to three point
• 30:09
  Speaker 2: eight percent in March twenty twenty four from three point
• 30:12
  Speaker 2: seven percent in February and that is roughly similar to
• 30:16
  Speaker 2: the levels recorded in October twenty twenty three. So the
• 30:19
  Speaker 2: employment outcome in March followed a larger than usual flow
• 30:23
  Speaker 2: of people entering employment in February and smaller than usual
• 30:27
  Speaker 2: flows in December and January. Things have returned to a
• 30:30
  Speaker 2: more usual pattern in March, which is interesting to see
• 30:34
  Speaker 2: looking over I guess the past three months, though, the
• 30:37
  Speaker 2: average employment growth is around forty thousand, eight hundred people,
• 30:41
  Speaker 2: which is softer than the momentum that was seen during
• 30:44
  Speaker 2: twenty twenty three, So less people are finding jobs. Bet sure,
• 30:47
  Speaker 2: the strength of the labor market is actually expected to
• 30:50
  Speaker 2: gradually weak and until the end of the year, given
• 30:53
  Speaker 2: there is often a lag between economic slowdown and then
• 30:56
  Speaker 2: labor market conditions. So what we see often, Becka, is
• 31:01
  Speaker 2: we see the economy starting to be a bit rocky.
• 31:04
  Speaker 2: You know. During COVID. I think that's a really good example.
• 31:06
  Speaker 2: We started hearing on the TV what was going on
• 31:09
  Speaker 2: with COVID overseas, we started hearing what was going on
• 31:12
  Speaker 2: with COVID in Australia. You know, we're starting to see
• 31:15
  Speaker 2: all of our friends and family work from home. And
• 31:18
  Speaker 2: it wasn't until a few months later that people started
• 31:21
  Speaker 2: to be made redundant. It wasn't until after that businesses
• 31:24
  Speaker 2: started going hold on, hold on. This is actually impacting us,
• 31:27
  Speaker 2: This is impacting me, This is going to change things.
• 31:29
  Speaker 2: So there's often a lag or you know, a bit
• 31:32
  Speaker 2: of a gap between when we see the economy slow
• 31:34
  Speaker 2: down and when people start to become unemployed because of
• 31:38
  Speaker 2: that economic slowdown. Does that make sense, yes, so leading
• 31:42
  Speaker 2: labor market indicators, like they seek Job add Index indicators
• 31:47
  Speaker 2: of a softening in labor demand, so less people are
• 31:50
  Speaker 2: needed at this point. Adding to this, the increase in
• 31:53
  Speaker 2: migration would continue to help to address some of the
• 31:56
  Speaker 2: tightness in the labor market. As a result, we're expecting
• 31:59
  Speaker 2: the unemployment rate to actually gradually rise from its current
• 32:02
  Speaker 2: low levels to reach the natural rate of unemployment by
• 32:05
  Speaker 2: mid twenty twenty four. So Beck, we are always going
• 32:10
  Speaker 2: to have an unemployment rate in Australia, right, It's not
• 32:13
  Speaker 2: necessarily an awful thing. That does not mean that people
• 32:16
  Speaker 2: are homeless. It actually is the percentage of the population
• 32:20
  Speaker 2: that do not work. We're not talking about retirees. We're
• 32:23
  Speaker 2: talking about people who are not in employment, and that
• 32:26
  Speaker 2: is always going to happen out of choice. Obviously, we
• 32:30
  Speaker 2: don't want people in the unemployment basket who don't want
• 32:33
  Speaker 2: to be in the unemployment basket, but we need to
• 32:35
  Speaker 2: be aware that people are in that and that is
• 32:39
  Speaker 2: very normal for a healthy economy.
• 32:41
  Speaker 4: Sure, it could be like state home peerians, maybe like
• 32:43
  Speaker 4: someone who's just turned eighteen yep.
• 32:44
  Speaker 2: And it could be people between jobs. It could be
• 32:46
  Speaker 2: people that are you know, in that bucket, either by
• 32:50
  Speaker 2: choice or maybe not by choice. But there's always people
• 32:53
  Speaker 2: in that and people come and go. Doesn't mean that
• 32:55
  Speaker 2: that same person has been in that bucket for the
• 32:57
  Speaker 2: last fifty years, you know.
• 32:59
  Speaker 4: Yep, yep.
• 32:59
  Speaker 2: Yeah, So it's important to go, oh, we want that
• 33:02
  Speaker 2: to zero. It's not going to be because we always
• 33:04
  Speaker 2: actually need some people who are unemployed because they come
• 33:07
  Speaker 2: and go from jobs. Right Otherwise there's no flow, there's
• 33:10
  Speaker 2: no wiggle room.
• 33:11
  Speaker 4: I never thought of it like that.
• 33:13
  Speaker 2: So it sounds bad, but we want it to be
• 33:15
  Speaker 2: at a stable rate. Right now we are stabilizing.
• 33:18
  Speaker 4: Sure, sure, Okay, good to know, good to know. So
• 33:20
  Speaker 4: what's the update on like the greatest Brillian dream, like
• 33:23
  Speaker 4: the residential housing costs? What's going on.
• 33:25
  Speaker 2: There is everything is cooked? So the pace of Residential
• 33:30
  Speaker 2: property price growth in April continued to be diverse across
• 33:34
  Speaker 2: capital cities due to differences in affordability, population growth, and
• 33:38
  Speaker 2: the housing supply, so significantly stronger gains were observed in Perth,
• 33:42
  Speaker 2: Adelaide and Brisbane, so not our main property players, while
• 33:47
  Speaker 2: at the other end of the spectrum, Melbourne recorded a
• 33:50
  Speaker 2: slight drop of point one percent. Okay, Dwelling interest payable
• 33:54
  Speaker 2: continued to increase by five percent. This is the softest
• 33:58
  Speaker 2: growth in dwelling in interest payable since June twenty twenty two.
• 34:02
  Speaker 2: As interest rates have plataued, so interest rates are now
• 34:06
  Speaker 2: kind of consistently steady, and while dwelling interest payable has increased.
• 34:11
  Speaker 2: And five percent sounds terrible, they did that on purpose
• 34:14
  Speaker 2: to make you go, oh, it's actually much nicer, or
• 34:17
  Speaker 2: five percent is much nicer than what it has been historically.
• 34:20
  Speaker 4: Sure, okay, nice and soft, nice and gentle.
• 34:22
  Speaker 2: Nice and gentle. Hopefully things are getting a little bit
• 34:25
  Speaker 2: more achievable. I mean, the great Australian dream is not
• 34:28
  Speaker 2: what it once was, and that I don't think is
• 34:30
  Speaker 2: ever going to change. But the way we get into
• 34:32
  Speaker 2: property is going to have to. So looking ahead, it
• 34:35
  Speaker 2: seems that property growth will be slower in twenty twenty
• 34:38
  Speaker 2: four than it was in twenty twenty three, in saying
• 34:41
  Speaker 2: that there's going to be persistent strong demand for housing
• 34:43
  Speaker 2: and limited new housing construction. These factors will likely lead
• 34:47
  Speaker 2: to further price gains. So when less dwellings are being built,
• 34:52
  Speaker 2: there's an increase in what people are willing to pay
• 34:54
  Speaker 2: for things that already exist. Okay, Regardless, the existing high
• 34:59
  Speaker 2: house will impact affordability, having a cooling effect on the
• 35:03
  Speaker 2: market and partially offsetting the games. So we're all good
• 35:07
  Speaker 2: when it comes to that. I said before that the
• 35:10
  Speaker 2: housard market is cooked. That's just personal opinion. So the
• 35:13
  Speaker 2: economy is going to tell us one thing. But I
• 35:16
  Speaker 2: think our want for being in property and our need
• 35:18
  Speaker 2: for being in property, it just looks a lot different
• 35:20
  Speaker 2: to what it used to totally.
• 35:22
  Speaker 4: I'm really actually this is quite a side note, but
• 35:24
  Speaker 4: my partner is looking for an apartment.
• 35:26
  Speaker 2: And are you marrying rich?
• 35:28
  Speaker 4: I'm marrying rich. You're marrying up. That's how you've got
• 35:31
  Speaker 4: to do it. You drop pop and you've got to
• 35:33
  Speaker 4: marry up.
• 35:34
  Speaker 2: YEA, marry up. I once got the advice marry first
• 35:38
  Speaker 2: for money and then second for love. I've screwed that
• 35:40
  Speaker 2: up by marrying first for love. But if anyone's taking
• 35:43
  Speaker 2: this advice, also, men can't recommend. My husband is the
• 35:47
  Speaker 2: only one I would accept. Yeah, we were talking about
• 35:50
  Speaker 2: this off air. We were you think straight as a choice.
• 35:53
  Speaker 4: True, I mean, I'll try not to fall into the
• 35:55
  Speaker 4: lap of a handsome man, but don't don't. But no,
• 35:59
  Speaker 4: she's tryed by an apartment and she's obviously, you know,
• 36:01
  Speaker 4: got conditional approval. All this kind of stuff keeps getting
• 36:05
  Speaker 4: outbid by I'm assuming people who already have a million
• 36:09
  Speaker 4: investment homes and just buying because they maybe they're bored
• 36:12
  Speaker 4: or they just want to add to their investment portfolio.
• 36:14
  Speaker 4: Because they have no conditions. They're paying with cash, and
• 36:16
  Speaker 4: I just feel really sad for the people out there.
• 36:19
  Speaker 4: If there's anyone out here listening who has just a
• 36:22
  Speaker 4: smaller hard slog, yeah, it's a hard slog, and I
• 36:25
  Speaker 4: just think, let the little ones have it. Let the
• 36:27
  Speaker 4: little guys have the little apartment, you know.
• 36:29
  Speaker 2: I feel like this is really common. And again we're
• 36:32
  Speaker 2: staying on this side notes. I think it's relatively interesting.
• 36:36
  Speaker 2: We're seeing an increase in what properties are going for
• 36:39
  Speaker 2: at auction. So if you know, let's pretend for a
• 36:42
  Speaker 2: hot second, your partner is buying at five hundred thousand
• 36:46
  Speaker 2: dollars and that's what she's been pre approved for. So
• 36:49
  Speaker 2: we know that she's been pre approved five hundred grand,
• 36:52
  Speaker 2: and she's going shopping at that level. When that happens,
• 36:56
  Speaker 2: often you'll find that a lot of people are being
• 36:59
  Speaker 2: approved for six hundred, but they're shopping at that lower level.
• 37:03
  Speaker 2: So what I would say to her is, while you've
• 37:05
  Speaker 2: been approved for that five hundred, and let's pretend it's
• 37:08
  Speaker 2: all just clean and she's happy to spend that. I
• 37:10
  Speaker 2: often give the advice, as you guys know, I own
• 37:13
  Speaker 2: a mortgage broking company. I do this day in day out.
• 37:16
  Speaker 2: When I'm not on the pod, I am in the
• 37:18
  Speaker 2: office talking about home loans. I would suggest that even
• 37:22
  Speaker 2: if you're approved for five hundred, looking at your budget,
• 37:24
  Speaker 2: making sure that that actually makes sense, because lots of
• 37:26
  Speaker 2: you might not want to buy at that price. But
• 37:29
  Speaker 2: having a look on real estate dot com or domain
• 37:31
  Speaker 2: or wherever you're shopping at what properties have actually sold
• 37:34
  Speaker 2: for and then what they were listed for, and more
• 37:37
  Speaker 2: often than not, you're going to see that a property
• 37:40
  Speaker 2: listed for maybe four hundred and thirty is going for
• 37:43
  Speaker 2: five hundred, which means that your partner might want to
• 37:46
  Speaker 2: reset what she's actually looking at and start to shop low,
• 37:50
  Speaker 2: because you might end up at that same five hundred amount,
• 37:53
  Speaker 2: if that makes sense. Whereas if she's just looking at
• 37:56
  Speaker 2: what properties are listed for and she goes great going
• 37:58
  Speaker 2: to this auction and currently it's valued between you know,
• 38:01
  Speaker 2: four eighty and five hundred, that's within my budget, there's
• 38:05
  Speaker 2: a very high probability that auction day comes and someone's
• 38:09
  Speaker 2: willing to pay five ten or five twenty for that property,
• 38:13
  Speaker 2: which wipes her out because she's only pre approved up
• 38:15
  Speaker 2: to five hundred. So we need to sometimes reset our
• 38:19
  Speaker 2: goalposts and look at well, if she's like shopping for
• 38:22
  Speaker 2: an apartment in Richmond, can we look on real estate
• 38:25
  Speaker 2: dot com dot au and have a look at what
• 38:27
  Speaker 2: those properties have actually sold for instead of what they're
• 38:31
  Speaker 2: listed for, because what they're listed for while a good
• 38:34
  Speaker 2: indicator people are hungry at the moment for property. We
• 38:37
  Speaker 2: know the interest rate has gone down. People are getting
• 38:40
  Speaker 2: really optimistic at the moment because they're going, all right,
• 38:42
  Speaker 2: well the interest rate. It's making me feel a bit ick,
• 38:46
  Speaker 2: but I also know, if we go back to that
• 38:48
  Speaker 2: Westpac data that I was talking about before the break,
• 38:51
  Speaker 2: we also know that interest rates are probably going to
• 38:53
  Speaker 2: go down, So short term pain, long term gain. I'm
• 38:57
  Speaker 2: happy to buy into the market right now before the
• 38:59
  Speaker 2: market increases, because what we know to be true is
• 39:02
  Speaker 2: that when interest rates go down, people's tenacity for purchasing
• 39:07
  Speaker 2: and they're willing to take on more debt goes up.
• 39:09
  Speaker 2: So once interest rates come down a little bit, people
• 39:12
  Speaker 2: are going to go all right, the pressure is off again.
• 39:15
  Speaker 2: I'm happy to pay what's another ten grand, so they're
• 39:19
  Speaker 2: more likely to pay more. So right now, I think
• 39:21
  Speaker 2: you've got a few people who are probably shooting are
• 39:24
  Speaker 2: in the feed. But we need to have a look
• 39:26
  Speaker 2: at what your property shopping strategy is and go back
• 39:28
  Speaker 2: to the drawing board. We can take this conversation off line,
• 39:31
  Speaker 2: but I think it's relatively interesting. Irrespective, Yes, because this
• 39:35
  Speaker 2: is how it works. We talk to or I talk
• 39:38
  Speaker 2: to so many people every day, and so to my
• 39:40
  Speaker 2: team about all right, we've been pre approof of five hundred,
• 39:43
  Speaker 2: what does that actually look like for you? What are
• 39:45
  Speaker 2: we shopping for? And I think if someone is a
• 39:48
  Speaker 2: good broker, I mean, I'd love it if you used us,
• 39:50
  Speaker 2: But if someone is a good broker, they are going
• 39:53
  Speaker 2: to have a conversation about what that actually means for you.
• 39:56
  Speaker 2: So like if you are preapproved back and you came
• 39:58
  Speaker 2: in to me and said, oh, babe, what am I approof?
• 40:00
  Speaker 2: What we go through everything? And I say you could
• 40:02
  Speaker 2: borrow up to five hundred grand, you go fantastic, feat
• 40:05
  Speaker 2: I'm going to go shopping. My team are going to
• 40:08
  Speaker 2: go wait, wait, wait, what are we shopping for? How
• 40:10
  Speaker 2: are we shopping? Because I don't want my clients and
• 40:12
  Speaker 2: my community to be disappointed or be in that game
• 40:16
  Speaker 2: for a really long time. I don't want you to
• 40:18
  Speaker 2: be frustrated by that process over and over. And how
• 40:22
  Speaker 2: many people do we hear that are like, oh, I've
• 40:24
  Speaker 2: been shopping for a property for a year. I often
• 40:27
  Speaker 2: want to go all right, beck, we need to go
• 40:29
  Speaker 2: back to the drawing board. What does this look like?
• 40:31
  Speaker 4: Yes, this is very very helpful.
• 40:33
  Speaker 2: Completely offside. So Beck, as I was saying before in
• 40:37
  Speaker 2: my rent, when interest rates go down, demand for property increases.
• 40:42
  Speaker 2: So into twenty twenty five, anticipated lower interest rates and
• 40:47
  Speaker 2: the fact that the government is probably going to introduce
• 40:49
  Speaker 2: a whole heap of initiatives to boost supply and let's
• 40:53
  Speaker 2: be honest, improved conditions for builders. We are expecting to
• 40:57
  Speaker 2: drive a bit of a rebound in dwelling investments, so
• 41:00
  Speaker 2: you won't be surprised to see that maybe mid next
• 41:03
  Speaker 2: year we'll have a lot more millennials shopping for property.
• 41:06
  Speaker 4: Great, okay, things are looking up.
• 41:08
  Speaker 2: Things are things looking up? Your house, things are looking
• 41:12
  Speaker 2: up yours.
• 41:12
  Speaker 4: You're so cute. That's almost the correct saying. Now, there
• 41:16
  Speaker 4: have been some changes. When you get you don't get up, No,
• 41:20
  Speaker 4: I love it. I actually prefer that way, thank you.
• 41:22
  Speaker 4: There have been some changes made to the marginal tax rate,
• 41:25
  Speaker 4: like our superannuation rates, and also some other so sensies.
• 41:28
  Speaker 2: You get more super do you get more super?
• 41:31
  Speaker 4: And I'm very excited about that actually, but doesn't change
• 41:33
  Speaker 4: the amount that we take home from what I hear,
• 41:35
  Speaker 4: which is great. So our superannuation rates have obviously gone up.
• 41:39
  Speaker 4: And also some other initiatives labeled by the government to
• 41:43
  Speaker 4: support the cost of living crisis. Finally, thank goodness, are
• 41:46
  Speaker 4: these things to consider when looking at what will happen
• 41:49
  Speaker 4: in this quarter?
• 41:50
  Speaker 2: Yes, I want you to take them into consideration because
• 41:53
  Speaker 2: for most of us, they are going to be beneficial.
• 41:55
  Speaker 2: So if you beck earned between eighteen thousand and forty
• 41:59
  Speaker 2: five thousand pre July one, your tax rate would have
• 42:03
  Speaker 2: been nineteen percent. Your new tax rate is now sixteen percent.
• 42:07
  Speaker 2: That's great, which is great, But how we factoring this
• 42:11
  Speaker 2: into our budget. Is this an opportunity that we can
• 42:13
  Speaker 2: take to maybe put a little bit of cash aside
• 42:16
  Speaker 2: to take the pressure off, or if you're like, this's
• 42:18
  Speaker 2: not going to take the pressure off, I'm just glad
• 42:21
  Speaker 2: that there's a few extra dollars going into your account
• 42:23
  Speaker 2: each and every single month. Right. The other change that
• 42:26
  Speaker 2: has happened is if you were in the tax bracket
• 42:29
  Speaker 2: of forty five thousand to one twenty thousand, your tax
• 42:33
  Speaker 2: rate used to be thirty two point five percent, which
• 42:36
  Speaker 2: for me, understanding our community is the most common tax
• 42:41
  Speaker 2: bracket for you guys to be in. That tax bracket's
• 42:44
  Speaker 2: actually changed so instead of going up to one twenty,
• 42:46
  Speaker 2: it now goes up to one thirty five. So a
• 42:48
  Speaker 2: heap of people have dropped down a tax bracket which
• 42:51
  Speaker 2: is very, very sexy, and the tax rate has changed
• 42:54
  Speaker 2: from thirty two and a half percent down to thirty percent,
• 42:58
  Speaker 2: which is very very sexy. The old tax bracket used
• 43:01
  Speaker 2: to be one twenty to one eighty, which must have
• 43:04
  Speaker 2: been nice. If you're in that tax bracket. Joke's on you, though,
• 43:07
  Speaker 2: You're not getting a tax break because you probably don't need.
• 43:12
  Speaker 2: Do you know what someone's going to come for me?
• 43:14
  Speaker 2: And be like VI, I can't believe you've said that
• 43:15
  Speaker 2: we are under a lot of stress. We definitely earn
• 43:18
  Speaker 2: a lot of money, but we are under a lot
• 43:20
  Speaker 2: of I get it, but like I would actually much
• 43:22
  Speaker 2: prefer people who are earning less than one twenty to
• 43:24
  Speaker 2: get the tax breaks here today. But that bracket is
• 43:27
  Speaker 2: changing now, so instead of from one twenty to one eighty,
• 43:30
  Speaker 2: it's now one thirty five to one ninety, so it's
• 43:33
  Speaker 2: bumped up a little bit. Tax rate is the same though,
• 43:36
  Speaker 2: which I kind of agree with. Sure, if I'm being honest,
• 43:39
  Speaker 2: you are being taxed at before and now a lot
• 43:41
  Speaker 2: of people have dropped out of that and a lot
• 43:43
  Speaker 2: of people have been added to that. So historically, if
• 43:45
  Speaker 2: you earned one ninety, you would have been on a
• 43:48
  Speaker 2: higher tax rate of forty five percent, which for you
• 43:52
  Speaker 2: now you're on thirty seven percent. So money win. But
• 43:56
  Speaker 2: the old taxable income rate of forty five percent. Used
• 43:59
  Speaker 2: to be one eighty d plus. It is now one
• 44:01
  Speaker 2: ninety plus. Yes, so I think that that is to
• 44:03
  Speaker 2: me quite sexy, But it means that some of us
• 44:05
  Speaker 2: are going to be earning a little bit more taxed,
• 44:08
  Speaker 2: a little bit less super super sexy. The other thing
• 44:11
  Speaker 2: is superranuation changes, which I think are very exciting. Concessional
• 44:16
  Speaker 2: contribution cap used to be twenty seven thousand, five hundred,
• 44:19
  Speaker 2: which is the most amount of money that you can
• 44:21
  Speaker 2: contribute to get that fifteen percent tax rate. Right, Okay,
• 44:25
  Speaker 2: that's now increased to thirty thousand dollars. Great. The max
• 44:28
  Speaker 2: five year carry forward contribution, which means that if you
• 44:32
  Speaker 2: weren't contributing for historical years, you can kind of go, hey,
• 44:36
  Speaker 2: I know I didn't contribute last year. Can I use
• 44:38
  Speaker 2: that so that I still get my fifteen percent tax rate?
• 44:40
  Speaker 2: Can I use that?
• 44:41
  Speaker 4: Yes?
• 44:42
  Speaker 2: You can. It used to be one hundred and thirty thousand.
• 44:44
  Speaker 2: It's now one hundred and thirty two thousand, five hundred dollars.
• 44:47
  Speaker 2: Very nice superranuation guarantee which directly impacts you, Beck and
• 44:51
  Speaker 2: every single person in our community who earns income that
• 44:54
  Speaker 2: gets paid super It's gone from eleven percent to eleven
• 44:57
  Speaker 2: and a half percent, which I think is very, very sexy.
• 45:01
  Speaker 2: But it's also a really good conversation to have with
• 45:04
  Speaker 2: your employer if for some reason they've decided to take
• 45:08
  Speaker 2: that out of your take home pay.
• 45:10
  Speaker 4: Oh my goodness, Yeah, that's.
• 45:11
  Speaker 2: Not allowed, right, No, no, no, it is allowed. It's
• 45:14
  Speaker 2: going to be based on your contract. So some people's
• 45:17
  Speaker 2: contracts are going to be salary plus oh true soubranuation.
• 45:20
  Speaker 2: So if you're on a contract that stipulates you get
• 45:23
  Speaker 2: paid salary plus super, it should not have impacted your
• 45:27
  Speaker 2: take home pay. However, if you have a package and
• 45:31
  Speaker 2: they say, Beck, you're on a seventy thousand dollars package,
• 45:35
  Speaker 2: well they're still only going to pay you seventy thousand
• 45:37
  Speaker 2: dollars and that point five percent is going to come
• 45:39
  Speaker 2: from your take home pay and go into your SUPER.
• 45:42
  Speaker 2: Now's the time to have a conversation with your employer
• 45:44
  Speaker 2: and say, hey, cozy libs, babe.
• 45:47
  Speaker 4: Hey that hurt my feelings.
• 45:48
  Speaker 2: Say hey, that was really me. But having a conversation
• 45:53
  Speaker 2: with him and saying, hey, I know that that made
• 45:55
  Speaker 2: sense and I'm on a package, but I'd really like
• 45:57
  Speaker 2: to talk about getting point five percent paid into my
• 46:01
  Speaker 2: super in adition, because I don't think it's fair for
• 46:03
  Speaker 2: it to have been taken out of my take home salary. Great,
• 46:07
  Speaker 2: go listen to all our negotiation episodes and go to
• 46:09
  Speaker 2: our website and download that free pdf of how to
• 46:13
  Speaker 2: have that conversation. Yes and future you's gone, Thank you exactly,
• 46:16
  Speaker 2: and we're cheering you on. I love it. I think
• 46:18
  Speaker 2: we're done for today though, so many numbers, so many statistics. Beck.
• 46:22
  Speaker 2: At the start, you said that you were going to
• 46:23
  Speaker 2: be physically present but mentally not here. Was it as
• 46:27
  Speaker 2: bad as you thought it was going to be?
• 46:28
  Speaker 4: Honestly no, I feel like mentally I've been here the
• 46:30
  Speaker 4: whole time.
• 46:31
  Speaker 2: Oh thank you. That's actually a massive compliment. I'm going
• 46:35
  Speaker 2: to take it and run with it. Let's get coffee, guys,
• 46:37
  Speaker 2: have the best day. Thank you for tuning in for
• 46:40
  Speaker 2: a market update. I'm proud of you.
• 46:42
  Speaker 4: Bye, guys.
• 46:48
  Speaker 5: The advice shared on She's on the Money is general
• 46:51
  Speaker 5: in nature and does not consider your individual circumstances. She's
• 46:55
  Speaker 5: on the Money exists purely for educational purposes and should
• 46:58
  Speaker 5: not be relied upon to make an investment or financial decision.
• 47:02
  Speaker 2: If you do choose to buy a financial.
• 47:04
  Speaker 5: Product, read the PDS TMD and obtain appropriate financial.
• 47:07
  Speaker 2: Advice tailored towards your needs.
• 47:09
  Speaker 5: Victoria, Divine and She's on the Money are authorized representatives
• 47:13
  Speaker 5: of Money sherper P t y lt D A b
• 47:16
  Speaker 5: N three two one six four nine two seven seven
• 47:19
  Speaker 5: zero eight afs L four five one two eight nine