The glass remains half full!

Allow me to start on some positive points on the present state of our Aussie economy:

  • The Reserve Bank has left the cash rate at a record low of 1.50 per cent for the 26th straight month. Although this isn’t great news for term deposit holders, it is a gentle reminder that mortgage holders still have the opportunity to shop around for some competitive lending rates! Please reach out if you need assistance here.
  • The Australian economy grew by almost 1 per cent in the June quarter and by 3.4 per cent over the course of 12 months. A great result for the liberal government and no doubt a strong start for our new leader, Scott Morrison. Hopefully our man Sco-Mo can last longer in the leadership chair. We’ll wait and see!
  • The Australian jobless rate stands near a 6 year low at 5.3 per cent. Again, a great result for the Australian economy. It just goes to show that the people of our nation are prepared to get their hands dirty and burn the midnight oil.
  • A trade surplus of $1.5 billion was recorded in July – the 12th surplus in 15 months. This is keeping our nation of workers busy, given the extent of neighbouring countries buying more and more from us every year.

A couple of negatives are also in the mix, but we do not think there is anything to be majorly concerned about:

  • The US Federal Reserve lifted the federal funds rate to 2.00-2.25 per cent, which has caused some volatility on the U.S. share market. Despite this outcome, the Dow Jones is historically at record high levels (currently sitting at 26,774).
  • The Aussie dollar is hovering around US72 cents with Australia’s currency set to fall even further as local interest rates slide behind US levels. Not so good news for those wanting to travel overseas any time soon!
  • Petrol prices in Australia are at 4 year highs of around $1.50-$1.60 per litre. This is a hard pill to swallow, particularly for those that have the long commute to work.
  • Australia’s housing market has suffered 2.70 per cent drop over the course of 12 months from the month of September, making it a less attractive asset class for the investors seeking to generate strong returns in this market. However, there is a light at the end of the tunnel for first home owners!

Overall, the economy is growing at a faster rate than originally expected, which is a great sign. Despite softer home prices and higher fuel costs, we still believe the Australian economy is in a healthy state and are amazed at the job figures released – Australians must just love to work!

What’s the deal with Energy Prices?

Similar to refinancing your home loan, I read recently that households could cut their power bills by up to 20 per cent if they shopped around. It’s of no surprise that electricity bills in Australia have increased significantly in recent years but believe it or not, power bills have in fact fallen by approximately 1 per cent when inflation is taken into account.

What I thought was interesting is that Australians who had not picked up the phone to ask for a better deal could be paying around 20 per cent more than what they should be! This is preposterous! Therefore, a word of advice – Shop around for a better deal! This could be a huge benefit to your household budget in moving forward (particularly if you like having the air conditioning on).

 

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