Home Australia Australia suffers from crazy house prices and record-high petrol prices as wages stagnate #englishheadline #Australia #suffers #crazy #house #prices #recordhigh #petrol #prices #wages #stagnate

Australia suffers from crazy house prices and record-high petrol prices as wages stagnate #englishheadline #Australia #suffers #crazy #house #prices #recordhigh #petrol #prices #wages #stagnate

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Australians are feeling the pain as house values rise by 30 per cent a year, petrol prices hit record highs and used cars become more expensive – but wages are hardly growing.  

So with Twitter billionaire founder Jack Dorsey issuing a dramatic warning that global ‘hyperinflation is going to change everything’, is the worst still to come?   

The 44-year-old social media mogul issued a grim warning that rising inflation in the United States would become a global contagion: ‘It will happen in the US soon, and so the world.’

Under hyperinflation, prices rises at astronomical rates every month to the point money is carried around in wheelbarrows as prices, in some cases, literally double every day.

It has been seen in Zimbabwe, Germany’s Weimar Republic during the 1920s and Venezuela.

Australian house values are rising by 30 per cent a year, petrol prices are at record highs, used cars are more expensive but wages are hardly growing (pictured are Sydney business managers Elaine Stephanie and Oranith Phattrapanee preparing for the end of lockdown)

In Australia, house prices in some cities have increased by more than 30 per cent during the past year.

Worst hyperinflation in history

Germany: 29,500 per cent a month in October 1923

Greece: 13,800 per cent a month in October 1944

Zimbabwe: 79,600,000,000 per cent a month in November 2008

Venezuela: 10,000,000 per cent in 2019

Then there are increasing food prices with beef now 10.9 per cent more expensive than a year ago. 

Used car prices are also 36 per cent dearer than before the pandemic, as global Covid restrictions and a semiconductor shortage hamper the supply of new cars. 

Sydney and Melbourne motorists are paying a record 172 cents a litre for petrol. 

But these increases aren’t even remotely comparable to, say, Zimbabwe under murderous tyrant Robert Mugabe where the inflation rate was 79,600,000,000 per cent in 2008.

That occurred eight years after his ZANU-PF government forcibly took over white-owned farms, causing widespread food shortages and pushing up the price of bread to $10million Zimbabwe dollars as a bag of potatoes cost $160million in the local currency.

Nor is it anything like Venezuela under the socialist leadership of Nicolás Maduro where hyperinflation in 2019 hit 10million per cent.

This saw the a kilogram of milk powder cost 19,995 bolívars or half a typical salary.

Hyperinflation gripped Weimar Republic Germany after World War I and saw money carried around in wheelbarrows during the early 1920s, following the harsh reparation demands of the French-led Treaty of Versailles.

A loaf of bread cost 200,000 million marks in November 1923 and saw Germans turn to bartering as monthly hyperinflation reached 29,500 per cent.

Nonetheless, Australians would certainly be feeling cost-of-living pressures, especially with wages growth being weak for almost a decade.

Twitter's billionaire co-founder Jack Dorsey caused a bit of panic when he suggested global 'hyperinflation is going to change everything'. The 44-year-old social media mogul suggested that rising inflation in the United States would become a global contagion

Twitter’s billionaire co-founder Jack Dorsey caused a bit of panic when he suggested global ‘hyperinflation is going to change everything’. The 44-year-old social media mogul suggested that rising inflation in the United States would become a global contagion

The 44-year-old social media mogul issued a grim warning that rising inflation in the United States would become a global contagion: 'It will happen in the US soon, and so the world'

 

 

But these increases aren't even remotely comparable to, say, Zimbabwe under murderous tyrant Robert Mugabe where the inflation rate was 79,600,000,000 per cent in 2008. That occurred eight years after his ZANU-PF government forcibly took over white-owned farms (pictured are protesters in 2016 protesting against new government bonds which they feared could see a return to hyperinflation)

But these increases aren’t even remotely comparable to, say, Zimbabwe under murderous tyrant Robert Mugabe where the inflation rate was 79,600,000,000 per cent in 2008. That occurred eight years after his ZANU-PF government forcibly took over white-owned farms (pictured are protesters in 2016 protesting against new government bonds which they feared could see a return to hyperinflation)

During the last financial year, Australian pay levels grew by just 1.7 per cent, not much above the record-low annual pace of 1.4 per cent achieved in 2020.

Pathetic wage increases were occurring long before the pandemic with annual salary increases stuck below the long-term average of 3 per cent since mid-2013.

The good news is lower unemployment could push up wages.

The jobless rate of 4.6 per cent in September was much lower than usual, despite Covid restrictions and lockdowns in Sydney and Melbourne.

Westpac, Australia’s second-biggest bank, is expecting unemployment to fall to 3.8 per cent by the end of 2022.

That would be the lowest jobless rate on record since the Australian Bureau of Statistics began compiling monthly labour force data in February 1978 and would take unemployment back to levels last seen in 1974 for both men and women.

Australia’s jobless rate fell to 4 per cent in August 2008, as the mining boom coincided with the Global Financial Crisis. 

But in 2022, it could go even lower. 

With the lowest jobless rate in 48 years, Westpac is expecting wages growth to rise to 2.8 per cent, up from 1.7 per cent as of June 2021.

Nor is it anything like Venezuela under the socialist leadership of Hugo Chavez and Nicolás Maduro where hyperinflation in 2019 hit 10million per cent in 2019. This saw the a kilogram of milk powder cost 19,995 bolívars or half a typical salary (pictured is a long queue of retireees lining up outside banks in September 2018 to collect money from their pensions)

Nor is it anything like Venezuela under the socialist leadership of Hugo Chavez and Nicolás Maduro where hyperinflation in 2019 hit 10million per cent in 2019. This saw the a kilogram of milk powder cost 19,995 bolívars or half a typical salary (pictured is a long queue of retireees lining up outside banks in September 2018 to collect money from their pensions)

Used car prices in September were 36 per cent higher than before the start of the pandemic in March 2020 and are 11 per cent more expensive than a year ago, data from Datium Insights and Moody's Analytics showed (pictured is a 2013 VF-series Holden Commodore SSV)

Used car prices in September were 36 per cent higher than before the start of the pandemic in March 2020 and are 11 per cent more expensive than a year ago, data from Datium Insights and Moody’s Analytics showed (pictured is a 2013 VF-series Holden Commodore SSV)

That would still be below the long-term average but it would be the highest annual pace since the June quarter of 2013.

Australian house price increases

SYDNEY: Up 30.4 per cent to $1,499,126

MELBOURNE: Up 16.8 per cent to $1,037,923 

BRISBANE: Up 15.3 per cent to $702,455

ADELAIDE: Up 20.1 per cent to $667,888

CANBERRA: Up 32.4 per cent to $1,074,187

PERTH: Up 9.8 per cent to $598,601

HOBART: Up 31.9 per cent to $698,612

DARWIN: Up 33.2 per cent to $640,068

Source: Domain data on median house prices in the year to September 2021 

Westpac chief economist Bill Evans said wages growth instead of global Covid supply constraints were likely to push up consumer prices next year.

‘As we move through 2022 the source of the inflation pulse is likely to pivot from supply constraints to rising wages growth as the unemployment rate falls below 4 per cent by year’s end,’ he said.

An economic recovery, following the end of Covid travel and trading restrictions,  could also see the Reserve Bank of Australia raise interest rates in 2023, breaking a promise to leave it on hold until 2024 ‘at the earliest’.

Westpac is now forecasting the RBA moving in February 2023, which would see the cash rate rise from a record-low of 0.1 per cent and climb to 1.25 per cent by the end of 2024.

An interest rate rise also means higher mortgage rates, now as low as 2 per cent, even if the banks source most of their funds from overseas money markets instead of the Reserve Bank.

But it will at least slow down the rise in property prices.

Westpac is expecting Sydney property price growth to slow to 6 per cent in 2022 and fall by 6 per cent in 2023 as the Reserve Bank of Australia puts up interest rates. 

In the year to September, Sydney house prices surged by 30.4 per cent to a ridiculously affordable $1.499million, Domain sales data showed.

Real estate value increases have vastly outperformed both wage increases and inflation, with separate CoreLogic data showing property prices across Australia in September climbed by 20.3 per cent – the fastest annual pace since June 1989.

In the year to September, Sydney house prices surged by 30.4 per cent to a ridiculously affordable $1.499million, Domain sales data showed. Real estate value increases have vastly outperformed both wage increases and inflation (pictured is a house in Sydney)

In the year to September, Sydney house prices surged by 30.4 per cent to a ridiculously affordable $1.499million, Domain sales data showed. Real estate value increases have vastly outperformed both wage increases and inflation (pictured is a house in Sydney)

Westpac expected Sydney property prices to have rise to by 27 per cent in 2021 before dramatically slowing a 6 per cent in 2022, followed by a 6 per cent drop in 2023

Westpac expected Sydney property prices to have rise to by 27 per cent in 2021 before dramatically slowing a 6 per cent in 2022, followed by a 6 per cent drop in 2023

The consumer price index in the year to September rose by 3 per cent, which was at the top end of the Reserve Bank’s 2 to 3 per cent target.

While high, it was below the June quarter’s annual increase of 3.8 per cent – itself the highest since 2008 but nowhere near the 12.4 inflation rate of 1982 during a prolonged drought.

Nonetheless, the official inflation data had petrol prices at 153.85 cents a litre, following a 7.1 per cent rise in just three months.

By this week, average unleaded prices in Sydney and Melbourne had climbed past 172 cents a litre with Adelaide motorists paying 180 cents a litre.

Used car prices in September were 36 per cent higher than before the start of the pandemic in March 2020 and are 11 per cent more expensive than a year ago, data from Datium Insights and Moody’s Analytics showed.

Food has been mixed with the official inflation data showing beef and veal prices rising by 10.9 per cent as restaurant bills went up by 2.8 per cent.

Transport costs rose by 10.4 per cent but clothing and footwear prices went down by 3.9 per cent.

As for Mr Dorsey, he must be expecting an economic rebound considering that two months ago, his Square group announced it would take over Australian buy now, pay later juggernaut Afterpay for $39billion.

Nonetheless, the official inflation data had petrol prices at 153.85 cents a litre, following a 7.1 per cent rise in just three months. By this week, average unleaded prices in Sydney and Melbourne had climbed past 172 cents a litre with Adelaide motorists paying 180 cents a litre (pictured is a Sydney service station in October 2019)

Nonetheless, the official inflation data had petrol prices at 153.85 cents a litre, following a 7.1 per cent rise in just three months. By this week, average unleaded prices in Sydney and Melbourne had climbed past 172 cents a litre with Adelaide motorists paying 180 cents a litre (pictured is a Sydney service station in October 2019)



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#Australia #suffers #crazy #house #prices #recordhigh #petrol #prices #wages #stagnate

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