Latest news with #RBA
Mercury
a day ago
- Business
- Mercury
Retail trade falls despite Easter and Anzac Day
Don't miss out on the headlines from Money. Followed categories will be added to My News. Australians are still not spending despite back-to-back public holidays in April, and it could force the Reserve Bank of Australia to come to the rescue with additional rate relief. Retail sales fell by 0.1 per cent in April despite two holidays during the month, Australian Bureau of Statistics figures show. This follows growth of 0.3 per cent in March 2025 and 0.2 per cent in February 2025. Food-related spending was up, with cafes, restaurants and takeaway services growing 1.1 per cent to be the standout. Oxford Economics Australia lead economist Ben Udy said the RBA might cut rates even sooner than expected. 'This weakness is one indication that households are being a little cautious in the face of rising global uncertainty,' he said. 'We still expect consumption to rise over the rest of the year, supported by the recovery in real household incomes and RBA rate cuts. 'But unless consumption picks up a little more strongly in the coming months, the RBA may cut rates even sooner than we currently expect.' RBA governor Michele Bullock delivered further rate relief in May. Picture: NewsWire / Nikki Short The RBA began its rate-cutting cycle in February, pausing on the cash rate in April before cutting again in May. It has reduced the official cash rate from 4.35 per cent at the start of 2025 to 3.85 per cent after the second interest rate reduction. ABS head of business statistics Robert Ewing said retail spending eased in April, particularly on clothing. 'Falls were partly offset by a bounce-back in Queensland as businesses recovered from the negative impacts of ex-Tropical Cyclone Alfred last month,' he said 'The rise in food-related spending was driven by more dining out in Queensland this month. The bounce back comes after adverse weather negatively impacted cafe and restaurant sales, Mr Ewing said. Australians kept their hands in their pockets in April. Picture: NewsWire / Gaye Gerard There were mixed results across the industries, with the largest falls in clothing, footwear and personal accessory retailing, down 2.5 per cent, while department stores also slumped 2.5 per cent. This was partially offset by rises in other retailing up 0.7 per cent and household goods retailing which rose 0.6 per cent. 'Clothing retailers told us that the warmer-than-usual weather for an April month saw people holding off on buying clothing items, especially new winter season stock,' Mr Ewing said. Retail turnover rose in Queensland by 1.4 per cent and Western Australia 0.4 per cent, with all other states and territories recording a fall since March. 'Queensland retailers recovered from last month's temporary business closures and fewer customers,' Mr Ewing said. 'In April, we saw higher spending in the industries most impacted by ex-Tropical Cyclone Alfred. 'More people dined out and made recovery purchases on household items like furniture and electrical goods.' Originally published as Spending falls below estimates, as holidays fail to lift consumer spending
The Australian
2 days ago
- Business
- The Australian
Retail trade falls despite Easter and Anzac Day
Australians are still not spending despite back-to-back public holidays in April, which could force the Reserve Bank of Australia to come to the rescue with additional rate relief. The latest figures by the Australian Bureau of Statistics shows retail sales fell by 0.1 per cent in the month of April despite having two holidays. This follows growth of 0.3 per cent in March 2025 and 0.2 per cent in February 2025. Food-related spending was up, with growth in cafes, restaurants and takeaway services growing 1.1 per cent to be the standout. Oxford Economics Australia lead economist Ben Udy said the RBA may cut rates even sooner than expected. 'This weakness is one indication that households are being a little cautious in the face of rising global uncertainty,' he said. 'We still expect consumption to rise over the rest of the year, supported by the recovery in real household incomes and RBA rate cuts. 'But unless consumption picks up a little more strongly in the coming months, the RBA may cut rates even sooner than we currently expect.' RBA governor Michele Bullock delivered further rate relief in May. Picture: NewsWire / Nikki Short The Reserve Bank of Australia began its rate cutting cycle in February, pausing on the cash rate in April before cutting again in May. It has reduced the official cash rate from 4.35 per cent at the start of 2025 to 3.85 per cent after the second interest rate reduction. The ABS data was in April occurring prior to the second interest rate reduction. ABS head of business statistics Robert Ewing said retail spending eased in April, particularly on clothing. 'Falls were partly offset by a bounce-back in Queensland as businesses recovered from the negative impacts of ex-Tropical Cyclone Alfred last month,' he said 'The rise in food-related spending was driven by more dining out in Queensland this month. The bounce-back comes after adverse weather negatively impacted cafe and restaurant sales,'Mr Ewing said. Australians kept their hands in their pockets in April. Picture: NewsWire / Gaye Gerard There were mixed results across the industries with the largest falls in clothing, footwear and personal accessory retailing down 2.5 per cent while department stores also slumped 2.5 per cent. This was partially offset by rises in other retailing up 0.7 per cent and household goods retailing which rose 0.6 per cent. 'Clothing retailers told us that the warmer-than-usual weather for an April month saw people holding off on buying clothing items, especially new winter season stock,' Mr Ewing said. Retail turnover rose in Queensland by 1.4 per cent and Western Australia 0.4 per cent with all other states and territories recording a fall since March. 'Queensland retailers recovered from last month's temporary business closures and fewer customers,' Mr Ewing said. 'In April, we saw higher spending in the industries most impacted by ex-Tropical Cyclone Alfred. More people dined out and made recovery purchases on household items like furniture and electrical goods.'
News.com.au
2 days ago
- Business
- News.com.au
Property shakeup: Big bank flags surprise trends since rate cuts
A big bank executive has revealed savvy Aussies are outsmarting sky-high property prices and the soaring cost of living, with shock trends emerging since rate cuts. In a surprise move considering how badly the cost of living crisis has hit Australia, National Australia Bank has found 95 per cent of home borrowers have elected to maintain mortgage repayments at previous higher levels despite lower interest rates. NAB executive for home lending Denton Pugh said they've also seen a massive 10 per cent spike in people choosing an investment for their first property – sharing below the trends that have emerged since rate cuts and a shock forecast for what this means for the mortgage and housing market. Australia's biggest political property moguls revealed Australia's property market is picking up again. With school and public holidays, an election, and an RBA decision out of the way, we're seeing buyers and sellers re-enter the market. The Reserve Bank's decision to cut interest rates again this month wasn't a shock. With inflation now sitting comfortably inside the RBA's 2-3 per cent target range, most economists expected this move. When NAB cut its variable rate back in February, we saw activity increase. For mortgage holders, some chose to reduce their monthly repayments to free up cash, but more than 95 per cent of NAB customers have kept their repayments at the same level to pay down their home loan quicker and save more in the long term. Zac Efron's Aussie long lunch haunt is on the market On the buyer side, the cut provided a bit of a sugar hit for the market, but momentum eased in April as a mix of holidays, election uncertainty and anticipation around the RBA's next move saw many potential home buyers hit pause. Now that some of this uncertainty has cleared, and further cuts have been announced, more buyers are back searching for their dream home. At NAB, we've seen steady growth in first home buyer activity since February, with some entering the market through investment. We've seen a 10 per cent increase this year in buyers purchasing an investment property as their first home – a trend known as 'rent-vesting'. NAB insights show this strategy is especially popular in NSW and WA, where a home buyer buys in one suburb while choosing to rent in another. This is a popular strategy for younger buyers who want to get on the property ladder without giving up the lifestyle or location they love. MORE: Buyer of $12m mansion plans to give it away Culture Kings founders' bold $30m push Through May, new listings have started to recover. Consumer confidence, which dipped in April, is also trending up. And that matters because when people feel more confident, they're more likely to make a big purchase on something like a home. Lower rates and growing confidence should help carry the momentum we're seeing through the typically quieter winter months. But we're not expecting house prices to take off in 2025. While lower rates do give buyers a bit more borrowing power, stretched affordability and ongoing cost-of-living pressures are still holding price growth back. So, what should potential buyers be doing now? Start by getting clarity on your borrowing power. Speak to a banker and get pre-approval. In many instances, this can be done in under an hour. I was talking to a first home buyer who told me how quick her home buying journey was. She spoke to her banker to understand how much she could borrow, got pre-approved in under an hour, and just six weeks later she had the keys to her new home. With the market moving again, opportunities are there. Being ready to act can make all the difference. * This is an opinion piece by Denton Pugh who is the National Australia Bank executive for home lending.
Bloomberg
2 days ago
- Business
- Bloomberg
Darwin Port Tussle Highlights China-US Tension
Good morning, it's Angus here in Sydney. Here's what you need to know as we round out the week. Today's must-reads (listens): • Our podcast on the Port of Darwin showdown • How many RBA rate cuts? • Natural gas sector grapples with red tape In 2015, Chinese company Landbridge was awarded a 99-year lease over the Port of Darwin. Now, Australia wants to take it back and put it into local hands. This week on the Bloomberg Australia podcast, Rebecca Jones speaks to government reporter Ben Westcott and senior editor Chelsea Mes about why Beijing is speaking out against that decision, and what role the US might play.
News.com.au
2 days ago
- Business
- News.com.au
Precision Points: Stockpicking and fundamental value still keys for the patient investor
In Precision Points, Precision Funds Management executive directors Dermot Woods and Andy Clayton draw on insights from two decades on the front lines of equity markets to share their expertise with Stockhead readers. The world is heading increasingly in the direction of passive investing, ETFs and index tracking portfolio management. That lines up the capital held in major institutions, especially the super giants responsible for managing the retirement savings of millions of Australians, more closely to the momentum of the market. But fundies say there is still a role for stockpicking. Precision Funds Management's performance over the past month is a case in point, with portfolio managers Dermot Woods and Andy Clayton pointing to double digit gains, beating the performance post-Liberation Day of the broader market. They say the worm has turned outside the gold space, with a number of long-held conviction bets paying off. "The market's broadening out all of a sudden. There's a little bit of breadth to the rally which is interesting because any time we've had an indicator of that really in the last year or so, that's immediately been murdered," Woods said. "You can sort of smell the animal spirits returning to the smaller cap space and (investors) being a bit more open minded." One of the key triggers has been declining interest rates, with cuts in February and May taking the RBA cash rate to 3.85%, the lowest level since May 2023. "What benefits most from declining rates? All the gold guys will tell you it's gold because everything's good for gold for gold bulls," Woods said. " But what it's really good for is base metals and property and old fashioned cyclicals – contractors and things like that." Success stories Among the key contributors to Precision's performance in May were property sector stocks Cedar Woods Properties and Australian Finance Group (ASX:AFG). They've lifted a respective ~25% and ~22% over the past month. Cedar Woods is a small cap developer with around 9700 lots planned across 37 residential developments in WA, Victoria, Queensland and South Australia. AFG, meanwhile, is a mortgage aggregator, which recorded an 18.5% lift in mortgage lodgments for the third quarter of FY2025, its highest on record at $24bn. Woods said Precision had held the trade for a couple of years. "It's a patient trade really," he said. "Part of the reason we were happy to sit with a patient trade in property rather than say lithium is we're getting paid a dividend. "That's 2 or 3 times cash rate sitting there. And there's proper fundamental asset value that we look at, certainly in the case of Cedar Woods. "We bought it for the two things that are happening now, which is lower rates and stupid government kneejerk policy to bribe the electorate." The other, more recent trade, that has worked out has come in the base metals space, where copper miner Sandfire Resources (ASX:SFR) has quickly returned to all time highs within five weeks of being sold off to 12 month lows in the week of market mayhem following Donald Trump's tariff policy reveal. LME three month copper prices fell to US$8590/t on April 9, when SFR shares hit $8.15, but they've sharply rebounded to US$9635/t by May 8. There's been genuine market tightness behind that run. Copper smelters have spent most of the year paying miners to treat their concentrate because supplies are short compared to refining capacity in China, while at just 83,000t copper metal stockpiles in LME warehouses are their barest in two years. "There's always pockets of overvaluation. There's always pockets of undervaluation. And the one that we spotted two years ago was definitely property. It has taken two years to work to work out," Woods said. "The one we spotted two months ago was copper. We didn't think that would happen (in only) a month and a half." Fundamental value While sectors with strong momentum can make money at the right time of the cycle – gold miners and developers are a case in point right now – Woods and Clayton said they liked to look for stocks that offered fundamental value, which protected downside risk if the market turned. They're wary on gold and view a number of companies in the space as overvalued right now. But those which have long term cashflow generation and production growth in full view, like West African producer Perseus Mining (ASX:PRU), still ring true. "A lot of (gold stocks' prices) is influenced by what happens on the (passive ETFs) GDX or GDXJ overnight," Clayton said. "Which is why Perseus is one of our key holdings. We think ... fundamentally they're cheap." Precision thinks Perseus is unique, given it has two-three growth assets all of which can be funded through internal cashflows. "They're generating US$150 million a quarter in free cash, plus they've got growth," Clayton said. "They bought the Nyanzaga asset (in Tanzania) off OreCorp. They've just done FID on that. And they'll be arguably ... plus 600,000oz by FY28. "They have good, long life reserves at all their key projects. " Compared to the Aussie guys that's, I would say, probably trading 50% less than a comparable 500,000oz producer."
