2022 Year in review | Income Solutions
Summary
Then Russia threw a curve ball that reverberated around the world and suddenly people who had never given a thought to the Reserve Bank were waiting with bated breath for its monthly interest rate announcements. Despite the geopolitical challenges, Australia’s economic growth increased to 5.9% in the September quarter before contracting to an estimated 3 percent by year’s end, in line with most of our trading partners. The US market led the way down, finishing 19 percent lower, due to its exposure to high-tech stocks and the Federal Reserve’s aggressive interest rate hikes. Gross yields recovered to pre-Covid levels, rising to 3.78 percent in December on a combination of strong rental growth and falling housing values. Issues for investors to watch out for in the year ahead are: • A new COVID wave in China which could further disrupt supply chains across the Australia economy, and • Steeper than expected falls in Australian housing prices which could lead to forced sales and dampen consumer spending.
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