June – Jay Wu Report
2023 has almost reached half way. Lots of event It’s full of wanted to share some insights with you about the current state of the Australian property market and recent market movements in the ASX 200 and S&P 500.
Economic Indicators – Australia (Latest data in June 2023)
- Inflation – 7%
- Unemployment rate – 3.7%
- Interest rate – 4.1% (NEW)
- GDP growth – 2.3%
- Wage growth – 3.7%
Jay Wu’s Top 5 events in the past month
- US debt ceiling passed the senate
- RBA rate continues with 12th hike by 0.25% alongside with Euro zone and Canadian government
- AI related stocks surging led by Nvidia with 53% rise pass $1 trillion market valuation
- S&P 500 trend returned to technical bull market
- Oil price continue decline, OPEC cuts production
Real Estate Market
Resilient Australian Real Estate Market Sees Steady Growth
The Australian real estate market continues to display remarkable resilience, with positive indicators pointing towards a steady recovery. Let’s explore the key trends and statistics shaping the current state of the real estate market across major Australian cities.
In May, home values experienced a notable 1.2% increase nationwide. Leading the pack, Sydney recorded a remarkable 1.8% rise, closely followed by Brisbane with a commendable 1.4% increase. This consistent growth highlights the stability and attractiveness of these cities’ real estate sectors.
Since the market trough in January, Australia has seen a steady recovery, with overall home values rising by a significant 4.8%. This upward trajectory reflects growing buyer confidence and a more favorable market outlook.
One of the challenges faced by the Australian real estate market is the low stock level in the face of escalating housing demand. In May alone, the number of homes available for sale dropped by approximately 1800 units compared to April 2023. The current inventory level sits 15% lower than the same period last year and a staggering 24% below the five-year average. This supply-demand imbalance puts upward pressure on prices and presents opportunities for sellers.
While the combined capital cities have outpaced the combined regional areas, experiencing a growth rate of 2.8% compared to 0.8%, regional markets are showing promising growth potential. The ease of internal migration has relieved some pressure on regional areas, contributing to the overall strength of the Australian real estate market.
Although Brisbane’s property market still trails behind its recent peak by 9.4%, recent data suggests an upward trend. Capital city sales volume has picked up in the last three months, and Brisbane’s listings are tracking 40% below the five-year average, indicating a tighter market and increased competition among buyers.
The surge in home sales, surpassing the average by 6.1%, indicates heightened market activity and a positive response from buyers. However, potential risks such as interest rate hikes, mortgage stress, low consumer sentiment, and higher property prices should be carefully considered. These factors could impact the market, leading to increased spending and inflation.
In conclusion, the Australian real estate market demonstrates resilience and steady growth, fueled by rising home values across major cities. The low stock levels have created a competitive environment, leading to increasing property values. With the easing of internal migration pressure on regional areas and heightened market activity in capital cities, both buyers and sellers have opportunities. However, it’s essential to remain vigilant and well-informed about market conditions to make informed decisions.
Financial Market
Mixed Market Performance: Global and Australian Markets in May
In May, the global financial market experienced a mix of ups and downs. The Dow Jones Industrial Average fell by 3.5%, while the Nasdaq Composite Index rose by 5.8%, driven by strong technology stocks. The S&P 500 Index showed a modest increase of 0.25%. In Australia, the ASX 200 index dropped by 3%, making it the worst performer among global peers. The materials sector was hit hardest, declining by 4.5%. On the positive side, the information technology sector on the ASX 200 stood out, rising by an impressive 12%. Conversely, the consumer staples, financials, and consumer discretionary sectors faced challenges. Market volatility, inflation concerns, potential interest rate hikes, and geopolitical tensions influenced the market sentiment. Investors should closely monitor these conditions and remain cautious in the face of ongoing uncertainties.
If you have any further questions or would like to discuss your personal situation in more detail, please do not hesitate to contact me on 0402 686 929 or jaywu@aumr.com.au