A UK research report has found a growing number of couples over 60 live in separate households, a trend particularly pronounced among those entering a new relationship at this stage of their lives. Improved mental health is a bonus.
Speakers of the calibre of David Knoff, the expedition leader stranded with his team in Antarctic during COVID, can regularly be heard at this global institution that places a premium on knowledge, not qualifications.
The best place to find dividends are the banks
Melbourne just endured its second busiest auction weekend of the year with auction clearance rates hitting 75.9% up from 71.5% even as supply increased with 1,414 homes going under the hammer. Australian house prices have usurped their previous highs. Despite the slow vaccine rollout, and dire economic predictions, a positive message is ringing true: “Australia is back”.
Defying the naysayers and ignoring the haters, Australians have repeatedly and convincingly crushed Covid-19, without the use of any vaccinations, making us the envy of the world. Leading the world out of the pandemic, the Australian economy is bigger than it was pre-Covid. GDP growth of over 8.7% and 1.8% in the March quarter. It’s the strongest seen in Australia in more than half a century. The unemployment rate has dropped to 5.1%, household consumption is up 14% since June, retail sales are up, the stock market is booming and the residential property market is roaring. A feat not achieved by any other major advanced economy.
In a research article, Matthew Davison, Senior Research Analyst for Martin Currie Australia, part of Franklin Templeton, talks about the mechanics of the Australian housing market and whether it will be beneficial for the big banks. He says “we believe that the over-zealous provisions have further to be released as the broader economic buoyancy flows through to an improved outlook for bad debts and further earnings momentum. We should continue to see positive earnings momentum as the market improves their forward-looking bad debt forecasts for the banking sector.”
According to CoreLogic, the median price for a house in Hawthorn, Melbourne sits at cool $2.6m up over $200k in the year. In Melbourne values are up 2.2% from last month for a 9.4% increase in the year to date. Sydney is up 3.5% in May to be 15.1% in the year to date. The rise in prices come on the back of ultra-cheap interest rates, a loosening in bank lending policies, a doubling in the first homeowners grant and a pandemic that didn’t turn out as bad as first expected. Davison says “the boost in house prices has aided banks by contributing to credit growth, but more importantly rising house prices have been a feature of the improving economic backdrop.
All in all, Davison concludes that within Martin Currie’s ‘Value Equity’ strategy, “we are favouring an overweight position to banks, with higher active weights in ANZ Bank and NAB, a neutral position in Westpac, and an underweight in Commonwealth Bank (albeit we materially reduced this earlier in the year), due to the potential for valuations to better reflect bad debt unwinding, capital returns and improved credit growth.” Davidson focuses his strategy “on attaining sustainable dividend income and the says the best place to find dividends are the banks.”
