WealthGuru

Inflation rises to 7.3%

The chances of the Reserve Bank increasing the cash rate when it holds its next board meeting, in February, have just increased.

That’s after the Australian Bureau of Statistics reported an increase in inflation in November.

Inflation hit a recent peak of 7.3% in September and then declined to 6.9% in October, leading some to hope the cost of living would continue falling steadily. However, we now know inflation rose again in November, reaching 7.3% once more.

The main reason the Reserve Bank has been increasing the cash rate has been to drive down inflation to between 2% and 3%. With inflation continuing to rise, it’s likely the Reserve Bank will raise official interest rates again in February.

Wealth per person dips but remains high

The average Australian was worth $545,532 at the end of September, according to the latest data from the Australian Bureau of Statistics.

That figure was calculated by adding up all our assets (such as properties), subtracting all our liabilities (such as home loans) and dividing that figure by the number of people in Australia.

Although wealth per person has fallen a little from a record $576,264 in March, we are:

* Twice as wealthy as in 2013
* Three times as wealthy as in 2005
* Four times as wealthy as in 2003
* Five times as wealthy as in 2001
* Six times as wealthy as in 1998

Part of the reason we’ve become a lot wealthier is due to the long-term increase in property prices.

Spring selling season surprise

Spring generally sees a flood of new property listings hit the market – but not this year.

Typically, there are an average of 123,000 new listings across Australia in winter and 146,000 in spring, according to CoreLogic. However, this year, new listings fell between winter and spring.

* New listings in August quarter = 121,859
* New listings in November quarter = 118,734

CoreLogic's head of residential research, Eliza Owen, said one reason vendors may have chosen not to sell this spring was because home values were trending down and they didn't want to accept lower prices.

"So long as mortgage holders can afford their repayments, and do not need to move, sellers may be less and less motivated to put their property on the market at the moment. This is reflected in previous research from CoreLogic, which shows a positive correlation between capital growth and new listings volumes," she said.