See the world through the eyes of an economist.
Is the rental boom over?
After increasing 30-40% on pre-Covid levels, rents have now posted two months in a row of zero growth. Is the rental boom over?
Possibly, but I wouldn’t be betting on it. The annual growth rate, despite two months of zero growth, is still miles above long run averages. It’s been a wild ride, especially for units.
GDP: Poorer households, but more of them
A couple of interesting extras from last week’s GDP data. First up, this chart neatly shows how we are completely reliant on population growth for economic growth right now. Without population growth, we’d be going backwards.
The per capita recession is now the longest on record, though not as deep as the 90s recession.
Which all explains why households at the individual level are feeling poorer. They have eaten into their savings buffers, and if it weren’t for the mandatory savings of super and principal mortgage payments, savings would be falling.
When you look at real household income per capita, it’s now far and away the worst crash in history. No wonder households are struggling.
And not to rub salt in the wounds, but it’s also far and away the worst outcome in the world too.
Stay married, stay rich
I’ve seen this data a few times, but this chart neatly lays out what happens to your net worth if you get divorced, for women:
And men:
Staying married is one of the key indicators of wealth. Though I’d also note that the correlation runs both ways. It’s easier to work through your issues when the wolf of financial stress isn’t howling at your door.
And that’s how the world looked through the eyes of an economist this week.
DB.