Why the housing wealth effect is waning

Wednesday 5 October 2016

Yesterday’s retail sales figures for the month of August, released by the ABS, posted the weakest sales growth in exactly 3-years, coming in at just 2.6% annually (see next chart).

The latest slump in retail sales growth has been driven by household goods retailing and department stores – segments that could be considered most aligned with housing values and the “wealth effect” (see next chart).

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.