Inflation continues to cool, good news for the property market

We’re started the year with some pretty interesting data. Australian retail sales bounced in November, up 2%, which was stronger than expected. Although I suspect Black Friday sales lasting longer and migration were the two main contributing factors. I still think the consumer is slowing down, and that was reaffirmed by another fall in inflation.

This sets things up nicely for the RBA - they can sit on their hands and continue to wait to see the economy soften, before cutting late this year.

I go through these points and others in the video. If you don’t have time to watch, my points are:

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• Impact of Interest Rate Hikes: 2023's multiple interest rate hikes have significantly influenced the market, with their effects still unfolding. Australia seems to be trailing the US in economic trends, suggesting potential future shifts in the market.

• Retail Trade and Consumer Spending: November saw a surprising 2% increase in retail trade, largely due to extended Black Friday sales. However, this may not fully represent consumer strength, as December's data could reveal a different story.

• Influence of Migration: The significant increase in migration over the past year has had a noticeable impact on retail sales and housing demands. This demographic shift is a critical factor in understanding current market dynamics.

• Inflation and Housing Market: Inflation is showing a downward trend, with CPI falling from 4.9% to 4.3%, indicating potential changes in monetary policy. However, the housing market remains a concern, with high rents and prices persisting due to limited supply.

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I anticipate a period of market adjustment and potential stabilisation, with key indicators being retail sales, inflation, and interest rates. Staying informed and adaptable is crucial for navigating the market this year.

Stay tuned as I continue to monitor these developments, providing insights and updates to help navigate the Australian property market in 2024.