3.3% wages: the number that decides housing

At half past 11 this morning, the Bureau prints the wage price index for the June quarter — and it’s the number that helps decide whether Australia tracks New Zealand and Canada, or holds the softer landing. - New Zealand real house prices are down close to 30% in real terms since early 2022 - Canada is down about 20%; Australia’s latest monthly move was -0.7%, the biggest since December 2022 - National dwelling values fell 0.7% in July; Brisbane was down 0.6% and Adelaide 0.2% - North Bendigo is moving differently to Brunswick East: stronger yield, lower price, tighter local signals If you want the street-level version for your own suburb, the link is in the description and pinned in the comments: https://ripe.house/brief-wages Disclaimer: This content is general information only and does not take into account your personal objectives, financial situation or needs.

30%. That's how far New Zealand house prices have fallen after inflation from their 2022 peak. Canada's down 20. Australia's fall so far is 0.7% in one month, our biggest since 2022. At half past 11 this morning, the Bureau prints the number that decides which future we get, and one Australian market just moved the opposite way. Start with the scoreboard. Since early 2022, New Zealand real estate has lost close to 30% in real terms. Canada about 20. Australia over that same stretch is down a fraction of that because we never went as high and we never hiked as hard. Here's the escalation. The reason those two markets fell and we didn't comes down to a single lever. New Zealand's central bank took its cash rate to 5.5%. Canada went to five. The Reserve Bank stopped at 4.35. That gap, a bit over one percentage point, is most of the difference between a 30% fall and a soft landing. And now ours. National dwelling values fell 0.7% in July. That is the largest single monthly fall since December 2022. Brisbane down 0.6. Adelaide down 0.2. Both now two months in a row. Why this matters and why today New Zealand and Canada are not cautionary tales because they crashed. They're cautionary tales because of how they crashed. Both ran the boom harder than we did. New Zealand up 164% after inflation from 2010. Canada about 150. Australia rose 40. Then both hiked rates further than we did. Both let unemployment climb and both slammed the door on migration while we left it open. That last one is the piece most people miss. Canada cut arrivals hard. In New Zealand, net migration stopped dead and enough young Kiwis left for Australia that the housing pressure drained out on its own. We did the opposite. Arrivals kept running well ahead of what we were building. That shortage is the flaw under our market. So Kotality's argument is that five years of growth left Australian households with reserves to absorb a shock. Their head of research Gerard Berg calls what's coming prolonged but not necessarily deep. The counter case comes from Alan Oster who ran the numbers at NAB for years. His line is conditional. If unemployment gets a five in front of it expect a 10 to 15% fall from the peak. Right now it's 4.4. Which brings us to half past 11 this morning. The Bureau prints the wage price index for the June quarter. Last read wages up 0.8% for the quarter, 3.3% for the year and that annual number has been drifting down. Wages are what service a mortgage. If wage growth holds near 3.3 households absorb three rate hikes and the Kotality case holds. If it slips while unemployment turns you're looking at Oster's scenario. That's the whole ball game and it prints in a few hours. Here's the series itself, 3.6% in the year to March 2025, 3.3% in the year to March 2026. The June quarter is the bar that fills in at half past 11. Watch that third bar because everything we just talked about resolves into it. So where does that leave the actual streets? System watch and both of today's suburbs are in Victoria, the state that's been falling longest. North Bendigo, three kilometers north of the Bendigo CBD, median sold price $600,000, gross yield 4.85%, vacancy 2.9%. 4,000 people and a Ripe House R score in the 100th percentile. Short-term sold price signal up 3.2% while the national number went backwards. Both sides of the ledger then. On the buy side, $600,000 and a short-term sold signal of plus 3.2% while the national number went backwards. On the rent side, 4.85% gross y