Episode Details

Boy, there's a lot going on in the world right now isn't there?

Overseas there are all the geopolitical issues, and back home there are our own political issues plus concerns about wages growth, inflation, and the economy.

Of course, Australia's economy and our property markets don't operate in isolation, and that's why each month I take time out to have a look at the big picture, the macroeconomic factors affecting not just Australia's economy, but the world economy, to help us understand what's ahead for us, and I do this once a month in these Big Picture Podcasts with Pete Wargent.

There has been a lot happening since I last spoke with Pete, so I'm sure you'll get a lot out of the show.

Russia / Ukraine

• A lot of the world has been imposing sanctions on Russia, which will greatly impact the Russian economy.
• There is currently a huge humanitarian crisis.
• The world is seeing increased fuel and gas prices.
• Australia will probably reduce its dependence on Russian fossil fuels.
• Inflation will probably stick around longer because of this conflict.
• Monetary policy will become more complicated worldwide.
• We are likely to see more spending on defence.

Brisbane Floods

There has been some recent dramatic flooding in Brisbane, and while in the medium term our focus must be on the safety and rebuilding of Queensland, we also must consider the long-term effect of this flooding.

• The initial focus will be on clean up.
• Next will be repairs and insurance claims.
• In the five years after the 2011 floods, house prices in Brisbane increased by about 25%
  • History suggests that the housing market will snap back quickly.

Australia's Great Resignation?

Information from the NAB Survey:

• While around 1 in 5 working Australians actually did change jobs in the past year, when asked about their plans to do so, almost 1 in 4 (23%) said they were also considering leaving their current place of employment.
• A further 4 in 10 (41%) indicated they were not considering leaving their current jobs but were keeping up to date with potential job opportunities.
• Around 3 in 10 (31%) said they had no intention to change jobs and did not keep up with potential job opportunities.
• Just over 1 in 20 (6%) were unsure.
• A greater share of full-time workers are considering leaving their jobs over the next 12 months (24% vs. 18% of part-timers).
• By age, younger workers are more likely to be considering a change (28%), but a sizeable share of Australians aged 30-49 (23%) and 50-64 917%) are also considering doing so.
• Importantly, the survey also finds that many of the key reasons workers are contemplating leaving their jobs are "push" factors - a lack of personal fulfillment, purpose or meaning, lack of career growth, mental health, poor pay, and benefits. Many Australians who are considering changing jobs are also looking for a fresh start, with around 3 in 10 planning to move to a different or new role in a new industry.

Wages data and Interest rate rises.

As expected, the Reserve Bank Board decided to maintain the cash rate at 10 basis points.

When is the Reserve Bank going to raise interest rates? How high will interest rates go this cycle?

These are questions of speculation and concern to commentators, homeowners, and investors.

Some commentators were pointing to the possibility of rate hikes as soon as this June.

If the RBA raises interest rates this year this will further decelerate already slowing housing price growth.

However, for the bank to raise the cash rate, it will need inflation 'sustainably' within the 2% to 3% range – a scenario that would require wages growth in the order of 3-4%.

Although the latest inflation data was stronger than expected an