Two issues with Australian housing are that it is expensive and household debt is high. According to the 2016 Demographia Housing Affordability Survey, the median multiple of house prices (in cities with over 1 million people) to household income is 6.4 times in Australia versus 3.7 in the US and 4.6 in the UK. In Sydney it’s 12.2 times and Melbourne is 9.7 times.We see the boom in Sydney and Melbourne is slowing largely due to APRA’s measures to.....
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A Few Good MonthsThe Australian equity market has enjoyed a few good months, though once again it is now facing valuations challenges. Irrespective of how the market deals with this challenge, income returns from the market remain very attractive relative to interest rates. Given that local interest rates could fall even further in coming months, this suggests that the high yield equity theme is likely to perform relatively well in most market co.....
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Global Market OutlookRisk markets strengthened further as at last month, helped by a rise in oil prices this year, signs of a Q2 rebound in US economic growth and growing acceptance to the fact the Federal Reserve may raise US interest rates.World equities (ex-Australia) in local currency terms rose 1.7%. Australian equities outperformed on a local currency basis with a 3.1% gain, helped by the RBA’s rate cut and an associated weakening in the $A.....
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Performance & GrowthThe performance of individual capital cities remains somewhat diverse. Sydney and Melbourne continue to record much stronger annual growth rates, while the rest of the cities are seeing relatively slow growth or minor value falls.It is important to note that the rate of growth in Sydney and Melbourne is slowing. Considering the large weighting applied to Sydney and Melbourne within the combined capitals index (due to the l.....
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UncertaintyThe British referendum to quit the European Union sparked a wave of uncertainty on financial markets around the world and triggered a huge sell off of shares.For most of this year, international investors held an underweight position in UK equities as compared by the benchmarks against which they track their performance. Recently, the top-performing quartile of global funds had moved to a neutral & overweight positions.Prior to the.....
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Performance & Growth Looking at the change in home values over the first quarter of 2016, Brisbane and Perth were the only capital cities to record value falls, down 0.1% and 0.9% respectively. Over the past year, home values across the combined capital cities increased 6.4%, which is the slowest annual rate of value growth since September 2013. The annual rate of value growth is well below the most recent peak of 11.1% recorded over the 12 m.....
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World Economy The world economy will continue to demonstrate an uneven pattern, reflective of different policy settings as well as structural forces. For the US, the story for 2015 will be renormalisation with increasing of interest rates. For Japan and China, it will be monetary policy. For the Eurozone, price deflation to continue. Regardless, whether and when the Federal Reserve will end its zero interest rate policy will once again become t.....
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When Emotional Intelligence (EQ) first appeared to the masses, it served as the missing link in a peculiar finding.people with average EQs outperform those with the highest IQs 70% of the timeThis anomaly confused the broadly held assumption that IQ was the sole source of success.ecades of research now point to emotional intelligence as being the critical factor that sets star performers apart from the rest of the pack. The connection is so stron.....
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What it means for you13 May 2015The Treasurer's ‘no surprises’ Federal Budget involves limited superannuation and taxation changes, with a number of key measures having been announced prior to Budget night. Of note is the Government’s announcement that it will reform a number of family assistance measures, as well as the means test for the Age Pension.Below is a summary of key announcements that may affect you from a financial advice perspective......
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Life doesn't get better by chance – it gets better by change. Economic Revolution We are living through a new economic revolution. The first revolution occurred in the Middle East about 12,000 years ago, after the last Ice Age, and it gave us farming. Instead of the usual question 'where do we find water?' someone asked 'how can we make water come to us?' and thus irrigation began. Nomadic people were able to stay and settle on the land. The seco.....
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