The important news in the first month of 2025 centred on a further sharp deceleration in inflation, the full pricing in of a series of interest rates cuts from the RBA and the start of the Trump Presidency in the US.
The other major issue to unfold in Australia is falling house prices at a national level, but it remains the case that market conditions are uneven from city-to-city…
A busy 2024 ended with the RBA holding official interest rates where they started the year – at 4.35 per cent.
The RBA has now held official interest rates steady for more than a year despite the substantial fall in inflation, the weak economy, the slowing in wages growth and the flood of interest rate cuts around the world.
The last month has seen what might be called “green shoots” of an economic recovery in Australia, aided by an easing in cost of living pressures as inflation has retreated towards the RBA target band.
It is important to note that these encouraging signs are from a weak starting point – it is too early to be confident of a meaningful economic recovery, but it is encouraging to see some better news.
In summary, economic growth in the Australian economy remains weak, the unemployment rate is rising, wages growth is slowing and inflation is falling back towards the RBA’s 2 to 3 per cent target. The interest rate hikes since May 2022 are working.
In what could turn out to be an unwelcome tension in the economy, the weak economy continues to underpin a lift in the unemployment rate, while the pace at which the rate of inflation is falling is slower than the RBA would like.
The broad economic themes that kicked off 2024 remain in place, with economic weakness, unemployment moving higher and inflation set to fall to the RBA’s 2 to 3 per cent target.
The past month was dominated by news of weaker economic growth, a still fragile labour market and an upward blip in inflation. There was no surprise when RBA left interest rates steady at 4.35 per cent after its June meeting, meaning there has been no policy change since the last rate hike in November 2023.
The Australian property market continues to deliver stable results in most jurisdictions despite the higher cost of living currently being experienced by many Australians… The construction sector remains tight with pressure on supply-chains relating to materials and labour evident, however we are seeing trends suggesting we are at, or very close to, the top of the price-hiking cycle.
Markets are volatile. Weak economic conditions and falling inflation has rekindled expectations of interest rates cuts in Australia and much of the industrialised world in coming months… The next readings on inflation and unemployment will be critical in the timing of those cuts.
The important news in the first month of 2025 centred on a further sharp deceleration in inflation, the full pricing in of a series of interest rates cuts from the RBA and the start of the Trump Presidency in the US.
The other major issue to unfold in Australia is falling house prices at a national level, but it remains the case that market conditions are uneven from city-to-city…
A busy 2024 ended with the RBA holding official interest rates where they started the year – at 4.35 per cent.
The RBA has now held official interest rates steady for more than a year despite the substantial fall in inflation, the weak economy, the slowing in wages growth and the flood of interest rate cuts around the world.
The last month has seen what might be called “green shoots” of an economic recovery in Australia, aided by an easing in cost of living pressures as inflation has retreated towards the RBA target band.
It is important to note that these encouraging signs are from a weak starting point – it is too early to be confident of a meaningful economic recovery, but it is encouraging to see some better news.
In summary, economic growth in the Australian economy remains weak, the unemployment rate is rising, wages growth is slowing and inflation is falling back towards the RBA’s 2 to 3 per cent target. The interest rate hikes since May 2022 are working.
In what could turn out to be an unwelcome tension in the economy, the weak economy continues to underpin a lift in the unemployment rate, while the pace at which the rate of inflation is falling is slower than the RBA would like.
The broad economic themes that kicked off 2024 remain in place, with economic weakness, unemployment moving higher and inflation set to fall to the RBA’s 2 to 3 per cent target.
The past month was dominated by news of weaker economic growth, a still fragile labour market and an upward blip in inflation. There was no surprise when RBA left interest rates steady at 4.35 per cent after its June meeting, meaning there has been no policy change since the last rate hike in November 2023.
The Australian property market continues to deliver stable results in most jurisdictions despite the higher cost of living currently being experienced by many Australians… The construction sector remains tight with pressure on supply-chains relating to materials and labour evident, however we are seeing trends suggesting we are at, or very close to, the top of the price-hiking cycle.
Markets are volatile. Weak economic conditions and falling inflation has rekindled expectations of interest rates cuts in Australia and much of the industrialised world in coming months… The next readings on inflation and unemployment will be critical in the timing of those cuts.
We would like to acknowledge the Traditional Custodians of the lands, seas, and communities in which we provide our services. We would also like to pay our respects to the Elders past, present and emerging, and the continuing cultural influence they have on Australia.
Zagga Market Pty Limited (Australian Credit Licence 490904) ACN 611 662 401 acts as the Servicer of loans acting on behalf of the credit provider, Zagga Investments Pty Limited (AFSL 492354) ACN 615 154 786, trustee of the Zagga Investments Lending Trust
All portfolio numbers quoted correct as at 31 January 2025.
*Average investor return across the active portfolio as at 31 January 2025.
**Target return is after expenses and any applicable management fees for the year ending 30 June 2024. OCR = Australian Reserve Bank Official Cash Rate.
Past performance is not a reliable indicator of future performance and investments are subject to investment risk, fees and costs. Returns are not guaranteed.
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Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Economic conditions may change.
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