00:00Inflation has come down by half, but nobody seems to appreciate it except economists and
00:07graph jockeys like me. I think there are a couple of reasons for that. First, inflation
00:13has fallen, but prices have not. Falling inflation simply means that the pace of price rises
00:19is less than it was, which is small comfort if your income still isn't keeping up. Second,
00:24the prices of essentials went up more than discretionary items and are still rising more.
00:29And one essential in particular is killing us – insurance. Now that's largely caused
00:35by climate change affecting housing insurance, so it's not temporary. And there's nothing
00:40more essential than rent, which has been rising at between 8 and 10 per cent a year for three
00:46years. Now rents took off in the pandemic, but Airbnb kept them there by choking off
00:52supply. You might be thinking, yeah, but the number of short-term rentals has come down
00:56since the pandemic. Sure, but it's still 170,000. And on REA this week, the number
01:02of properties in Australia up for long-term rent was less than a third of that – 61,866.
01:10That's a huge imbalance. Now a group called Grounded has researched short and long-term
01:14rentals in 13 locations around Australia and found that landlords are getting 81 per cent
01:19more for short-term rental. So the pressure on rents won't be temporary either. Rent
01:25and insurance are the main reasons inflation is still a bit too high despite 13 rate hikes
01:31to the discomfort of the Reserve Bank. But neither of them can be controlled by higher
01:37interest rates. In fact, if interest rates do go up again this year, all that'll happen
01:42is that the prices of rent and insurance will keep going up, but so will the price of that
01:47other non-discretionary item – borrowing money.
01:55For more UN videos visit www.un.org
02:25Thanks for watching!
02:55www.un.org
02:57www.un.org
02:59www.un.org
03:01www.un.org
03:03www.un.org
03:05www.un.org
03:07www.un.org
03:09www.un.org
03:11www.un.org
03:13www.un.org
03:15www.un.org
03:17www.un.org
03:19www.un.org
03:21www.un.org
03:23www.un.org
03:25www.un.org
03:27www.un.org
03:29www.un.org
03:31www.un.org
03:33www.un.org
03:35www.un.org
03:37www.un.org
03:39www.un.org
03:41www.un.org
03:43www.un.org
03:45www.un.org
03:47www.un.org
03:49www.un.org
03:51www.un.org
03:53www.un.org
03:55www.un.org
03:57www.un.org
03:59www.un.org
04:01www.un.org
04:03www.un.org
04:05www.un.org
04:07www.un.org
04:09www.un.org
04:11www.un.org
04:13www.un.org
04:15www.un.org
04:17www.un.org
Comments