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Economics Worth Listening To | My Bui

Episode Summary

When My Bui warned that the worst might still be ahead for inflation, many investors were expecting rate cuts. Now the AMP macroeconomist joins Julian Khursigara to explain what she is watching and what it could mean for Australia’s property market. They discuss underlying inflation, the RBA’s interest-rate decisions, and why a slower pace of falling home prices does not mean the market has reached its bottom. My also unpacks the different pressures facing houses and units, the short- and long-term effects of first-home-buyer incentives, and the housing supply challenge. For investors, her message is to look beyond alarming headlines and be more selective about where and when they buy.

Episode Notes

KEY TAKEAWAYS:

  1. Look beyond headline inflation. My explains why the RBA watches underlying measures such as the trimmed mean, while fuel prices and expiring rebates can make the headline figure more volatile.
  2. The interest-rate outlook can change quickly. At the time of recording, My expected further pressure on the RBA to raise rates. She explains the inflation risks behind that view rather than treating any decision as certain.
  3. A slower decline is not a market bottom. My sees signs that the pace of home-price falls may be easing, but distinguishes that from prices having finished falling.
  4. There is no single Australian property market. Cities, suburbs, price brackets, houses and units can move through different cycles. A national headline will not describe every prospective purchase.
  5. First-home-buyer support has trade-offs. Deposit schemes and concessions can help buyers enter the market, but My argues that policies which increase purchasing capacity may also add to price pressure over time.
  6. Housing supply is the deeper challenge. The discussion covers construction costs, labour and productivity constraints, and whether the mix of skilled migration could help Australia build more homes.
  7. Investors need to be more selective. My cautions against assuming that broad property gains will continue as they have in the past. Julian and My discuss the risk of waiting for FOMO before buying, and My closes by encouraging listeners to read multiple sources and put negative news in context.

Market figures and forecasts in this episode reflect the discussion at the time of recording, not current conditions.

CHAPTERS

00:00 My Bui’s inflation warning
01:05 Meet My Bui and her work as a macroeconomist
03:15 Making economics accessible
05:41 Was the worst still to come for inflation?
08:46 Wages and inflation pressures
10:22 The inflation number property investors should watch
12:29 What might the RBA do next?
14:08 Government spending and inflation
16:51 What higher rates mean for mortgage repayments
17:36 Has the housing market turned?
20:15 Why different property markets move differently
24:27 First-home buyers and government incentives
26:44 Why housing supply is the underlying problem
28:22 Migration and construction capacity
33:39 Everyday investors and negative gearing
35:18 What property investors should watch next
41:00 My’s advice on financial literacy

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