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