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National News Australia

Updated rate hike forecasts and the outlook for housing values

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NSW Northern Rivers Breaking News
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Updated rate hike forecasts and the outlook for housing values

Cash rate forecast updates from ANZ Bank has reverberated through the economics, banking and finance and property industries this week. The Reserve Bank has also publicly stated the official interest rate is still probably well below where it needs to be.

More will be known following the June quarter inflation figures, to be released next week, followed closely by the RBA’s regular monthly meeting on the first Tuesday in August.

Despite the RBA’s view that Australian households are well-placed to manage further rate hikes, what would the ramifications be if the upwards revision to ANZ’s cash rate forecast proves correct? Long story short, it would spell more bad news for the trajectory of housing values. Since the first rate hike in May, the downwards trend in value growth has steepened, with the rate of decline accelerating across Sydney and Melbourne.

Interestingly Brisbane, which was previously enjoying a run of high quarterly growth in housing values, has abruptly joined the decline trend with the rolling four-week change in dwelling values turning negative through the first week of July, according to CoreLogic’s daily hedonic home value index. Since peaking, Sydney housing values are down -4.4%, with most of the decline (-3.8%) occurring since the May 5 rate hike. Similarly, in Melbourne, housing values are down -2.6% since then, comprising the bulk of a peak to current decline of -2.8%.

Growth in housing values is broadly slowing around the country, and it is likely more regions will succumb to negative movements over the coming months.

Our latest Mapping the Market data released this week showed of the 3,085 house and unit markets analysed in the June quarter, 41.9% had declined in value. It’s double the proportion that recorded negative rates of growth in Q1. To put the figure in perspective, at the height of the 2017-2019 downturn, almost 81% of house and unit markets were recording a quarterly decline in values. In the early phase of COVID, housing markets went through a broad-based but short-lived decline when 67% of markets were in decline, while during the peak of the pandemic growth cycle in early to mid-2021, only 3.2% of markets were recording a decline in value.

With household debt at record highs, and most of that debt held in housing assets, the household sector is highly sensitive to the rising cost of debt.  Add to this the extremely high prices for non-discretionary goods such as food and fuel, and it’s clear that household balance sheets are likely to be more challenged as mortgage rates increase.

While labour market conditions remain tight, there isn’t a great deal of concern that households will fall behind on their debt repayment schedules, however it is likely that households will be pulling back in other areas of their expenditure to ensure they can fund essential purchases as well keep up to date on their debt servicing obligations.  Sizeable repayment buffers, which the RBA recently estimated to be around 21 months for variable mortgage rate borrowers, should also help to cushion distress across the mortgage sector.

Consumer sentiment continued to trend sharply lower in June, with the monthly Westpac-Melbourne Institute index falling another -3%. The sentiment index is down nearly -20% since December and has fallen every month through 2022.  Westpac notes the pace of decline is comparable to previous shocks historically.  With an index value of 83.8 (noting anything below 100 indicates pessimists outweigh optimists), the sentiment reading has only been this low historically through periods of major disruption (pandemic, GFC, 90’s recession and 80’s recession).  The decline is mostly being driven by concerns around inflation, and to a lesser extent higher interest rates, but readings of housing sentiment have also declined, especially in NSW and Victoria.  Clearly consumers are very sensitive to cost pressures, implying a fragile household sector and likely points towards a broader pull back in consumption and housing market activity until sentiment starts to improve.

Overseas arrivals and departures data for June shows an ongoing ‘normalisation’ in international movements for both arrivals and departures.  Both measures are now tracking at around half of their pre-pandemic levels, but trending higher.  The return of migration back to Australia is likely to flow into additional rental demand – boosting demand in what is already an extremely tight rental market.  We should also see a gradual boost to tourism sectors as overseas visitors pick up, although there may be some downside impact as Australians embark on overseas holidays rather than the domestic oriented travel we have seen through the second half of the pandemic.

 

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Local News

POLICE MINISTER REFUSES TO BACK RURAL CRIME INQUIRY

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Police Minister Yasmin Catley after refusing to back rural crime inquiry.
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POLICE MINISTER REFUSES TO BACK RURAL CRIME INQUIRY

 

Amidst a surge in criminal activities gripping rural and regional areas of NSW, the Minister for Police has rejected the necessity of a parliamentary inquiry to address this rising crime menace.

In today’s budget estimate questioning, Police Minister Yasmin Catley faced inquiries about her stance on supporting the 84 councils and numerous local communities pleading for assistance. In response, the Minister refrained from expressing her support for an inquiry.

Shadow Minister for Police, Paul Toole, expressed his astonishment at the Minister’s response.

“An inquiry would provide the insights we urgently require to comprehend the root causes of these issues and determine the necessary resources for our diligent police force to combat this wave of crime,” Mr. Toole asserted.

“This Minister seems to be neglecting the prevailing problems, particularly if they don’t pertain to metropolitan areas. She was even unaware of a police station’s two-week closure until she read it in the Daily Telegraph!

Police Minister Yasmin Catley after refusing to back rural crime inquiry.

Police Minister Yasmin Catley

“We cannot allow this situation to persist, where residents are fearful of stepping outside their homes. No one should have to live in such apprehension.

“We must ensure that an ample police presence is established, with the necessary resources to proactively address and deter criminal activities, rendering rural areas inhospitable to potential wrongdoers,” he emphasized.

“We require a bipartisan-supported inquiry to address the growing problem of regional and rural crime; it’s a straightforward necessity.”

Supported by the NSW Country Mayors Association, the NSW Police Association, and NSW Farmers, recent findings reveal that crime, law, and order have ascended to the top five emerging concerns in New South Wales. Their research illustrates that up to 90% of crimes, including vehicle theft, break-ins, sexual assault, and domestic violence, are occurring within our regional communities.

 

For more rural news, click here.

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Local News

Inflation and Government Policy: A Growing Concern

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people protesting for inflation and government policy as it is a growing concern.
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Inflation and Government Policy: A Growing Concern

 

In recent times, inflation, a persistent economic concern, has assumed a new dimension. Many now view it not merely as a result of market forces but as a government-induced issue. This perspective is supported by the significant uptick in government-imposed fees, charges, and taxes, resulting in a staggering 7.5% increase, surpassing the standard inflation rate by 2%. One noteworthy contributor to this phenomenon is the government’s regular hike in petrol prices every 90 days, causing a ripple effect across the economy, inflating prices across the board.

The clarion call is evident – it’s high time for state, local, and federal governments to re-evaluate and scale back these escalating charges. Concerned citisens are making a simple plea: no more rate hikes. This sentiment stems from the belief that such increases primarily bolster bank profits rather than the welfare of the general populace.

people protesting for inflation and government policy as it is a growing concern.

Moreover, if these rate hikes are intended to curtail consumer spending, it’s time for a reassessment. Retail spending has reached an all-time low, indicating that the strategy has indeed achieved its intended purpose. Voters have prudently tightened their financial belts, restraining their expenditures, and it’s now incumbent upon governments to follow suit by discontinuing the unrelenting 7.5% tax increases.

A pivotal moment on the horizon is Melbourne Cup Day, prompting speculation about potential actions by the Reserve Bank of Australia (RBA). This occasion offers a unique opportunity for the RBA to address the issue of government-induced inflation and capture widespread attention. It’s a chance to chart a new course, one aimed at alleviating the financial burdens faced by everyday Australians.

The first step in this direction could involve alleviating cash flow difficulties, offering much-needed relief to businesses and individuals grappling with escalating costs. By addressing these concerns collaboratively, the government and financial institutions can tackle the root causes of inflation and usher in much-needed economic stability. The time has come to transition towards fiscal responsibility and create a more consumer-friendly economic landscape.

 

For more New South Whales news, click here.

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National News Australia

Five charged after investigation into “rip on, rip off” method of accessing drugs concealed in shipping containers

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NSW Northern Rivers Breaking News
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Five charged after investigation into “rip on, rip off” method of accessing drugs concealed in shipping containers

Drug and Firearms Squad detectives have charged five men following an ongoing investigation into the supply of large commercial quantities of drugs concealed in shipping containers.

Strike Force Biles was established by State Crime Command’s Drug and Firearms Squad in May 2023 to investigate a criminal syndicate allegedly using a method commonly referred to as “rip on, rip off” to access prohibited drugs concealed in legitimate shipping containers.

To date, strike force detectives – with assistance from the Australian Federal Police (AFP) and Australian Border Force (ABF) – have seized 201kg of cocaine from three containers, with a street value of $105m.

Six people have already been charged for various related offences, which remain before the courts.

Following further inquiries, just after 6am yesterday (Thursday 19 October 2023), strike force detectives – with assistance from the Public Order & Riot Squad and Raptor Squad – executed eight search warrants across Woodpark, Rydalmere, Wentworthville, Plumpton, Merrylands, St Clair, and Seven Hills.

At the Woodpark address, police arrested a 18-year-old man who they will allege directed the local criminal syndicate in ‘ripping off’ the containers.

He was taken to Granville Police Station where he was charged with 12 offences including knowingly/recklessly direct criminal group, take part in supply large commercial quantity of prohibited drugs, manufacture prohibited drug, knowingly deal with proceeds and property proceeds of crime, and possessing ammunition, DECCD, housebreaking implements, and means of disguising face with intent to commit indictable offence.

The man was refused bail to appear in a Children’s Court today (Friday 20 October 2023).

A 28-year-old man was arrested at the Plumpton address and taken to Blacktown Police Station, where he was charged with eight offences including participate in criminal group, take part in supply large commercial quantity of prohibited drugs, possess ammunition without holding a licence or permit, and possessing housebreaking implements and means of disguising face with intent to commit indictable offence.

He was refused bail and appeared in Blacktown Local Court yesterday.

In Merrylands, police arrested an 18-year-old man who was taken to Granville Police Station, where he was charged with 11 offences including participate in a criminal group, take part in supply of large commercial quantity of prohibited drugs, knowingly deal with proceeds of crime, and possessing an unauthorised pistol, DECCD, housebreaking implements, and means of disguising face with intent to commit indictable offence.

He was refused bail to appear in Parramatta Local Court today.

Another 18-year-old man was arrested in Bondi and taken to Bondi Police Station, where he was charged with seven offences including participate in criminal group, take part in supply of large commercial quantity of prohibited drugs, knowingly deal with proceeds of crime, and possessing housebreaking implements and means of disguising face with intent to commit indictable offence.

He was refused bail to appear in a Children’s Court today.

In Seven Hills, police arrested a 25-year-old man. He was taken to Blacktown Police Station where he was charged with participate in criminal group, deal with property proceeds of crime, and possessing ammunition without holding a licence or permit, and identity info to commit indictable offence.

The 25-year-old was refused bail and appeared in Blacktown Local Court yesterday.

During searches of the properties, police located a number of items relevant to their investigation including $37,000 cash, 4kg of methylamphetamine, 3kg of cocaine, a replica firearm, ammunition, electronics and luxury jewellery and watches.

All the items were seized to undergo further forensic examination.

Police will allege in court the 18-year-old Woodpark man received contracts alerting him to a shipment of drugs and directed the group to identify and then break into the containers concealing the prohibited substances.

Those drugs – usually cocaine – were then supplied to a nominated recipient before the group would receive a payment.

Investigations under Strike Force Biles continue.

Anyone with information that may assist investigators is urged to contact Crime Stoppers: 1800 333 000 or https://nsw.crimestoppers.com.au. Information is treated in strict confidence. The public is reminded not to report information via NSW Police social media pages.

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