May 9, 2024 by Dymphna

Investors are back, while cafes go bust: the economy in pictures

See the world through the eyes of an economist: Housing finance, deposits and café closures.

These are the charts that caught my eye this week. First up, finance data suggests that investors are returning to the market in a big way. The dollar-value of investor mortgages issued is the highest on record, outside the Covid bounce.

Still with the housing market, Domain data shows that the LVR (loan to value ratio) of the market overall has fallen to the lowest level on record. That means people are stumping up bigger deposits, possibly thanks to the bank of mum and dad.

The job ads data continue to tell us that the official unemployment rate should be higher than what it currently is. The number of new job ads on SEEK in Australia fell 4.7% m/m in April to the lowest level since January 2021.

And if you’re reading this in a café, spare a thought for café owners right now. Bankruptcies in the food and accommodation sector have lifted to record highs.

Like a lot of retail, hospitality spending hasn’t increased for a year or so. This is despite a growing population, which points to lower per-capita spending on takeaways.

At the same time, café owners, like the rest of us, are being hit with inflation. The costs of everything you need to make a café work are on a breakaway.

And that’s how the world looked through the eyes of an economist this week.