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  • Writer's picturepeterward4

Ascientials Update MARCH 2024

Family relaxing at the lake

In this edition

  • Newcastle International Airport - completion 2024

  • Inflation down, interest rates are next

  • Housing supply - a contradiction?

  • Proptrack Home Price Index results - February 2024

  • Off the property track...

Postive and negative gears

Newcastle International Airport - completion 2024

The new international terminal at Newcastle Airport in NSW's Hunter region was commenced in 2022 and funded with $55 million from the federal government. It is set to complete in 2024.

This significant development promises to bring economic growth and enhanced connectivity to the region, with expectations of 850,000 additional visitors and a $12.7 billion economic boost over 20 years.

As an investment proposition, this augers well for the greater Newcastle region.

Unfortunately the regions's exposure to mining represents a considerable economic risk. Coal mining contributes some $14.9 billion to the NSW economy - with around half of that coming from the Hunter. The region represents nearly half of all mining jobs in NSW - and that doesn't include the variety of ancillary support industries including engineering, equipment suppliers, transport etc. Once coal mining is discontinued, it will leave a considerable economic hole.

The new airport may just be the stimulus needed to establish a solution to this risk (in the form of new industry/commerce) - but it is likely to take at least a couple of decades to happen.


Inflation down, interest rates are next

In our May and September 2023 editions I wrote of the "yield curve" being a reliable bellwether for interest rates and my expectation that the economy would show signs in early 2024 that interest rates would be heading down.

Inflation continues to fall - now at 4.1%. Trade Economics are forecasting 3.4% by end of April - which suggests that our forecast about declining interest rates by mid-year is right on track. In a recent post, Michael Matusik is right on the money about rates. His post provides a very nice, concise, overview of interest rate expectations - both for 2024, and 2025.


Australia map with pin at Perth

Housing supply - a contradiction?

With all the scaremongering going on in the media about a crisis of housing supply, one could be forgiven for wondering how the values in some markets can be falling if there's such a shortage of supply? It all seems like one big contradiction.

The core of the matter is that the supply/demand equation is a two-part equation i.e. we simply cannot say that, because there's a shortage of supply, prices must increase. To do so means demand is driven entirely by supply - which is not true. Demand for housing is driven first, and foremost, by affordability.

However, while demand/supply is at the core of it, Corelogic have just released a report which demonstrates that media reports and government spin are not telling the whole story.

Finally!... someone reporting some sensible facts in the matter.


George Titch - genius on economic cycles

PropTrack Home Price Index results - November 2023

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Off the property track...

This edition sees the introduction of a new segment - something interesting that is not property related. Your click stats will let us know if it's worth keeping.

This month, from Visual Capitalist:




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