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Property prices at all-time highs in Sydney

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Is it time to sell in Sydney?

House prices in Sydney, Australia have skyrocketed by 7 percent over the last quarter – the highest gain in almost 33 years.

It comes on the back of a lack of supply in the market and cashed-up buyers making the most of record low-interest rates.

Tim Lawless from CoreLogic says “such a synchronized upswing is an absolute rarity across Australia’s diverse array of housing markets.”

Across the country, house prices rose by an average of 10.6% over the past twelve months, with Melbourne the worst-performing capital city.

House prices in Australia / Image File

Why the spike in Aussie Property Prices?

Australia has recovered reasonably well from the COVID-19 pandemic and with that – so too is the housing market.

Melbourne and Sydney lead the way.

Despite the country’s first recession in nearly three decades, Aussie home values – including houses and apartments – ended 2020 3 percent higher, according to CoreLogic data.

The data also detailed that home values are surging at over 2 percent above average.

According to another report, the Domain House Price index released on January 28, the nation’s median detached house price hit a record high of $852,940 in the December quarter.

All this, despite the steepest decline in population growth in decades thanks to international border closures – something that should, in theory, reduce demand for housing.

Nationally, many punters are now tipping double-digit property price gains ahead. Westpac economists are banking on a 15 percent boom in prices over the two years starting this December quarter.

RBA Interest Rate

Australia’s booming housing market has seen the number of home loans increase to the highest level in more than two years.

The Reserve Bank of Australia credit figures show total housing loans rose by a further 0.5 per cent in April for an annual pace of 4.4 per cent, the highest since January 2019.

Mortgages for owner-occupied properties rose from 0.6 percent to 6.2 percent annually according to statistical data from the RBA.

Investor loans rose 0.4 per cent to 1.1 per cent annually, the highest rate since December 2018.

The RBA and other financial regulators are keeping a close eye on developments in the housing market to make sure lending standards are not deteriorating at a time of sharply rising prices.

Overall, total credit in the economy rose from 0.2 per cent in April to 1.3 per cent.

Sydney home prices are continuing to rise. Image / Unsplash

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Money

Bitcoin surges to record highs post-election

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Bitcoin soared to nearly $80,000, reaching unprecedented levels following Donald Trump’s decisive presidential victory earlier this week.

This marks a significant 65.4% increase from its January low of $38,505, underscoring the cryptocurrency’s remarkable growth this year.

The surge is largely attributed to President-elect Trump’s commitment to establishing the United States as “the crypto capital of the planet,” signaling a potential shift toward more favorable regulations for digital currencies.

Investors are optimistic that the incoming administration’s pro-crypto stance will further bolster the market, potentially leading to sustained growth in the sector.

Analysts suggest that this momentum could pave the way for Bitcoin to reach even higher valuations in the near future.

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Money

Iron ore and oil prices drop as Beijing holds back

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China’s National People’s Congress announced a $1.3 trillion plan, but it’s focused on debt, not demand.

Mining giants BHP and Rio Tinto saw share prices fall as hopes for a strong stimulus faded.

Analysts say this “recycling debt plan” won’t deliver a boost for Australia’s resource exports.

Iron ore futures dropped 3%, and oil prices fell 2% after China’s announcement.

Some Australian economists see this as a missed opportunity for mining and the broader economy.

Beijing may wait for clarity on Trump’s trade policies before introducing more aggressive stimulus.

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Money

Powell defends the Fed’s independence from Trump

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As Trump’s presidency approaches, Fed Chair Jerome Powell signals he won’t back down on protecting the central bank’s autonomy.

With the election results still rolling in, Federal Reserve Chair Jerome Powell has already made it clear that he intends to uphold the Fed’s independence, even if it means clashing with the new administration.

In a statement on Thursday, Powell declared he would not resign if President-elect Trump asked him to, asserting it would be illegal for any president to fire or demote a sitting Fed governor.

This stance comes amid signals from Trump’s team indicating they may seek influence over the Fed’s monetary policies, including interest rate decisions, challenging the longstanding norms that keep the Fed separate from politics.

Not stepping down

Powell’s terse response to questions on the issue emphasized his commitment: when asked if he would step down at Trump’s request, Powell replied simply, “No.” And when asked if the president could legally demote Fed governors, he affirmed, “not permitted under the law.”

Historically, Trump has shown impatience with Powell’s decisions, especially on interest rates.

If Trump tries to replace Powell or other Fed leaders prematurely, he could face legal challenges and market backlash.

Economists argue that an independent Fed actually benefits Trump’s agenda by stabilising rates.

 

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