{"id":1348,"date":"2023-09-15T01:16:35","date_gmt":"2023-09-15T01:16:35","guid":{"rendered":"https:\/\/halcyonpw.com.au\/?p=1348"},"modified":"2023-09-15T01:16:41","modified_gmt":"2023-09-15T01:16:41","slug":"market-update-australias-rate-surprise","status":"publish","type":"post","link":"https:\/\/halcyonpw.com.au\/market-update-australias-rate-surprise\/","title":{"rendered":"Market Update | Australia\u2019s Rate Surprise"},"content":{"rendered":"\n
Key Points:<\/em><\/p>\n\n\n\n In this month\u2019s Market Insight, we look under the hood of the Australian economy to see the winners and losers from what has been the fastest rate hiking cycle since the late 1980s.<\/p>\n\n\n\n Households<\/strong><\/p>\n\n\n\n Households in Australia say they are unhappy. Consumer sentiment is lower than it was during Covid lockdowns or the Financial Crisis. Yet, restaurants seem busy, our highways are packed with Land Cruisers towing caravans and domestic air travel has recovered to pre-Covid levels. The unemployment rate is near a multi-generational low and house prices are again rising.<\/p>\n\n\n\n Clearly high interest rates and inflation are having an impact on how people feel, but what about their actual financial situation? Below, we dive into the average Australian\u2019s household accounts to see if there is a disconnect between sentiment and reality. The charts below show an estimate of per person cash flows and changes in asset prices since 2019. In aggregate, net cash flows haven\u2019t grown a whole lot since early 2021 (left chart), but the outcome hasn\u2019t been calamitous either. On the asset side, 2023 wasn\u2019t a great year for households, with falling house prices dragging around $10,000 per person from household wealth. However, this comes after three years of very strong gains in wealth and in practice, household spending has a pretty loose relationship with asset price returns anyway.<\/p>\n\n\n\n