Why the housing wealth effect is waning

Advertisement

By Leith van Onselen

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).

ScreenHunter_15292 Oct. 06 08.30

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).

ScreenHunter_15293 Oct. 06 08.52
Advertisement

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
Cancel at any time through our billing provider, Stripe
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.