Welcome to this week's Property News and to the end of Week 19 of COVID impacts.
AfterPay, buy now pay later, has become quite the rage, even for the Federal Government with the debt burden from the Great Disruption now likely to extend well in to the 2050's.
This week the government sold another $15bn of 31 year bonds at 1.94%, adding to the $36bn it has sold in the past few months. The bond program will continue in order to ensure the Government is able to fund its spending commitments. Given there was $40bn of capital waiting in the queue for the $15bn of bonds on offer, the likelihood is that future bonds will also be highly sought after and also bid lower.
The weight of capital chasing these bonds demonstrates that foreign and Australian investors (including Australian super funds) are prepared to accept less than the usual rate of inflation right through until 2051 in return for regular government-guaranteed interest cheques. This says something about the outlook ahead.
With a few people still holding an irresistible urge to socialise (and/or an absolute distrust in authority) further COVID cases are inevitable and more unfortunate deaths will come. As we have seen in Victoria, our Governments will enforce further lock downs leading to further impacts to businesses and ongoing devastating economic consequences for us all. The road to recovery will not be a straight path, but a slow grinding hill. Much like my beloved Alpe De-Heuz.
As occurs with each recession, there will be a new period of prosperity to follow, enabling us to gain more than we've lost in recent times. The next investment phase will require investment managers to look deeper and wider for assets which will stand up to the "new normal".
This week, we've included a new section on our website for Environmental, Social & Governance issues. As well as relevant news articles, we will provide some Q&A and resources to help you make better decisions about your ESG responsibilities.
If you have news or information to share with the industry, or wish to provide us some feedback, contact us at info@propertymarket.news to see how we can help you.
Until next week.
Warwick
Related Articles
