US inflation rises along with inflation expectations; Japanese machine tool orders up; India industrial growth eases; Aussie housing investors pull back; UST 10yr at 4.63%; gold and oil down; NZ$1 = 56.3 USc; TWI = 66.7

Latest USA CPI indicates inflation has ceased falling and is appearing to be poised to rise. The Biden administration was largely blamed and presumably booted primarily because of its affect, cost of groceries as a basic example Therefore it will be interesting to observe if that attitude and reaction at large, is rekindled under the new presidency and even more interesting though , if it isn’t.

As the fraud and corrupt government spending is stopped by DOGE USD interest rates will drop. Long term rates will drop first. 

US 2y and 10y selling off. Bond yields to the moon 🚀🥂

NZs slipping in the corruption index should be a concern for all. This comment is in the piece; "it [corruption] is a key cause of declining democracy, instability and human rights violations". So if we are being seen as more corrupt, then we also face declining democracy and loss of individual rights. 

These are topic which regularly get discussed here.

his (Trump's) very misguided tariff policies which everyone but him sees as sharply inflationary.

Good on you for calling it as it is,  DC.

Landlords pull out of Melbourne, Sydney apartment markets

Poor capital gains, along with high holding costs have spurred a jump in investors who are quitting the Melbourne and Sydney apartment markets, potentially reducing the supply of rental homes in those cities, data from CoreLogic shows.

Another factor in the burst of investor selling in the country’s biggest housing markets is the slowdown in their rental markets, as demand eases from lower overseas migration and rising household size.

Apartments in Sydney delivered just 1.8 per cent capital growth last year. Oscar Colman

As the door closes on some investors, the opportunity could beckon aspiring home buyers as affordability improves in Sydney and Melbourne, where dwelling prices are falling.

Around 8300 investor-owned properties were listed for sale across Melbourne in December, up 6.6 per cent from the previous year and climbed 14 per cent above the last five-year average.

Sydney investors are also leaving the market in droves. More than 6000 ex-rental properties were listed during the same period, which is 1.7 per cent higher than the previous year and 2.8 per cent above the last five-year average.

Apartments in Sydney delivered just 1.8 per cent capital growth last year, while Melbourne fell by 3 per cent. By contrast, Brisbane racked up 16.6 per cent, Adelaide gained 16.9 per cent and Perth 22.7 per cent.

Slowing demand has pushed Melbourne rents lower by 0.5 per cent compared to a year ago, while Sydney rents fell 0.2 per cent.

Victoria’s higher taxes on property investors and rental laws requiring minimum rental standards have added extra costs and depleted landlords’ cash flows.

“Melbourne is relatively unfavourable for investors, not just because of the new tax policies, but also very sluggish returns,” said Eliza Owen, CoreLogic’s head of research.

“Property holding costs have increased for investors because of the reduction in the threshold to pay land tax at the start of 2024. Some people may be cutting their losses and are trying to exit that market now.”

CoreLogic estimated that investors face a $ 292-a-week cash flow shortfall based on the median weekly mortgage repayments of $896 on a 6.45 per cent interest rate for investors and rental income of $604 a week.

In Sydney, landlords will need to plug a $611-a-week gap between rental income of $773 a week compared to $1384 weekly mortgage repayments.

The portion of investor-owned properties listed for sale ballooned to 31.2 per cent across Melbourne, up from the five-year average of 29.1 per cent.

Nearly 1000 ex-rental apartments were listed for sale in central Melbourne alone, up 44 per cent from the previous year. They are now sitting 30.7 per cent higher than the five-year average.

Investor-owned listings account for 54.8 per cent of all stock on the market in the CBD area, a sharp increase from the 49.7 per cent share over the past five years.

The investor exodus is also underway across Melbourne suburbs. In the Darebin-North district, the proportion of investor-owned listings blew out to 45.5 per cent, up from 38.5 per cent a year ago, after nearly 200 properties were added to the market.

Investors are also pulling out of Moreland-North, Glen Eira, Stonnington-West, Maroondah, Banyule, Whitehorse-West, Stonnington East and Darebin-South, adding a total of 1460 surplus stock to the market in those areas as of December.

Arjun Paliwal, head of research at buyer’s agency InvestorKit said some investors were selling, even for a loss, to get out of the poor-performing apartment markets in the city.

“Some investors who bought units or apartments in Melbourne have not received capital gains now for almost a decade, if not sometimes for the past 15 years, so they want to sell so they can deploy their capital elsewhere, or at least get rid of a property that’s been weighing their borrowing capacity down,” he said.

“Some investors have lost confidence that the potential rate cut will turn Melbourne’s apartment sector around because prices have not recovered even when interest rates fell to record lows a few years ago. Supply is clearly an issue there, so we’re seeing a lot of our clients decide to list the Melbourne units.”

Higher mortgage repayments and sluggish capital growth are also driving Sydney investors to sell.

In Parramatta, nearly 400 investor-owned apartments hit the market in December, accounting for 54 per cent of all listings.

Investors in central Sydney put 536 apartments on the market, lifting the share of ex-rental listings to 51.6 per cent, up sharply from the 47.8 per cent average in the past five years.

Further afield in Sydney, ex-rental listings also flooded the Chatswood-Lane Cove, Botany, Ryde, Marrickville-Sydenham, Manly and Blacktown-North, where they climbed by as much as 51.6 per cent.

Thomas McGlynn, chief executive at real estate agency BresicWhitney said more investors were leaving the Sydney market, compared to those coming in.

“Unfortunately, investors are still looking to sell than buy,” he said. “I think, we’re going to see a continuation of more, smaller investment units coming on the market.”

Ms Owen said those smaller rental apartments were unlikely to attract first-home buyers, despite more affordable price points.

“A first-time buyer isn’t necessarily interested in buying these micro-apartments built in the 2010s that were catered for investors, so even though more first-home buyers are coming into the market, they are unlikely to buy those apartments,” she said.

“I think Melbourne is going through a painful transition process now, with more properties coming into the market, but they don’t suit the home buyers of today, so we’re seeing this ongoing weakness in the market.”

so USA tarriffs are inflationary. are EU tarriffs inflationary?

Apparently you can build a super modern ferry for $275m

Austal Limited (ASX: ASB) is pleased to announce Austal Australasia has been awarded a contract valued between A$265 and A$275 million by Gotlandsbolaget of Sweden, for the design and construction of a 130-metre combined cycle, ‘hydrogen-ready’ vehicle passenger ferry. Part of Gotlandsbolaget’s ‘Horizon X’ program, the high-speed ROPAX catamaran will be the largest vessel ever constructed by Austal, and feature a unique, highly efficient combined cycle propulsion system that includes both gas and steam turbines – a first for high-speed craft, worldwide. With a capacity to transport up to 1,500 passengers, cargo and 400 vehicles, the ‘Horizon X’ multi-fuel catamaran will be designed by Austal with construction at the Austal Philippines shipyard commencing the first half of CY2026; utilising “green aluminium”, produced using energy efficient processes and technologies that use less carbon, resulting in lower emissions. Construction is scheduled to complete in mid-2028

"...his very misguided tariff policies which everyone but him sees as sharply inflationary."

Where is your evidence they are misguided?

You say everyone, really, everyone? That's an extensive statement.

American conservatives are in favor of these tariffs.

tut tut sir, maybe you should work in the news media rather than report on economics.

Can anyone recommend a better place to go for NZ economic news without biased political opinions? 

Thanks,

Chris