Rateseeker Business News Round-up August – 2024

Rateseeker Business News Round-up August – 2024

Over the past month, exciting developments have occurred in the Australian business and finance scene. The commercial property market is undergoing significant changes, driven by the increasing need for high-quality office spaces and industrial properties due to the booming e-commerce and infrastructure sectors. However, despite this positive momentum, investors are cautious about interest rate hikes and unpredictable consumer demand.

Meanwhile, Australia’s unemployment rate may soon reach its highest point, with slower job creation on the horizon. However, economists are optimistic, predicting that unemployment will either stabilise or slightly decrease in the next few months as businesses adapt to economic challenges and global uncertainties.

Additionally, data from the Australian Bureau of Statistics (ABS) shows the automotive industry faces ongoing supply chain issues, with car delivery times averaging 65 days, further exacerbating business planning for logistics and fleet management​.

Finally, the Australian Taxation Office (ATO) has issued a timely reminder for businesses to ensure they meet their employees’ superannuation obligations. The ATO stressed the importance of paying super contributions by the quarterly deadlines to avoid penalties and ensure employees’ financial futures are secure.

These combined trends highlight businesses’ need to remain flexible and well-informed in a quickly evolving environment. Stay on top of the most recent developments and stories in our monthly business and finance update below.

A surge in demand for retail, office spaces, and sub-$10M properties expected

According to Ray White Group, Head of Research Vanessa Rader, several significant trends are emerging in Australia’s commercial property sector as we move through 2024. First, a retail resurgence is on the horizon, fueled by strong population growth and limited new construction, expected to drive increased demand for high-quality retail spaces. Retailers are looking to capitalise on these favourable conditions by securing prime locations to meet rising consumer needs.

In the current real estate landscape, there is a noticeable rise in opportunities within the office sector, particularly for investors who maintain a long-term perspective. This can be attributed to the growing yields and the potential for rejuvenation or refurbishment of office spaces. Therefore, this moment presents itself as the opportune time for investors to strategically position themselves in anticipation of the projected increase in office occupancy in the years to come.

In today’s red-hot real estate market, there’s a fierce battle for properties priced under $10 million. Owner-occupiers and savvy investors are locked in a heated competition to snap up these coveted assets. With their accessibility and promise of strong, steady returns, properties in this range are undeniably appealing.

That’s not all. Homeowners, investors and prospective buyers should get ready for an upcoming surge in property development. The ongoing housing shortage is driving this wave, which is expected to push property prices and rental rates higher. Developers are gearing up to meet the increasing demand.

Ms Rader emphasises the growing significance of new investors entering the real estate market. A notable trend is the preference of many of these investors to seek the help of buyer’s agents to gain expert guidance in navigating the intricate property market.

Are you looking to expand your business and need a commercial loan? We can help. Contact our expert loan strategists and planners at Rateseeker, and we can help you borrow and take your business to new heights.

RBA predicts stability as unemployment nears peak

Australia’s unemployment rate has been inching upward, reaching 4.2% in July 2024, compared to just 3.7% in February, according to the Australian Bureau of Statistics (ABS).

While this may cause concern for many, the Reserve Bank of Australia (RBA) remains cautiously optimistic. They forecast only a slight increase, expecting the unemployment rate to settle at 4.3% by the end of this year and 4.4% by the end of 2025. This suggests a relatively stable outlook despite the rise.

What’s keeping the labour market steady? The RBA points to a strong participation rate and resilient working hours, alongside a job vacancy rate that—while lower than pandemic peaks—remains higher than pre-COVID levels. This means that while some jobs may be lost, demand for labour is far from disappearing.

The broader economic picture also offers hope. The Australian economy grew at an annualised rate of just 1.1% in the March quarter, and growth is expected to dip slightly to 0.9% in the June quarter. However, by December 2024, the RBA projects growth will rebound to 1.7%, rising to 2.5% by the end of 2025. This recovery will likely boost business profitability, increasing worker demand in the coming years. While the road to recovery may be slow, Australia’s labour market is poised for gradual improvement, driven by economic resilience and strategic planning.

Balancing price, reliability, and lead times for company vehicles

When planning to invest in a company car, it’s essential to consider not only the price and reliability but also the waiting time for delivery—especially in the current market, where supply chain disruptions have led to significant variability.

According to the latest data from Price May Car, the average waiting time for a new vehicle in June 2024 was 65 days, but some models have much longer delays.

For example, if you’re eyeing popular models like the Toyota Hiace, you could face a wait of 278 days, while the Toyota Corolla may take 216 days. Other vehicles like the Hyundai Staria and Ford Everest also have extended waiting periods, at 133 and 127 days, respectively.

On the other hand, some models offer much shorter delivery times. If you’re looking for a quicker turnaround, vehicles like the Subaru Impreza (15 days), Subaru Forester (16 days), and Mazda CX-5 (19 days) stand out for their faster availability.

Considering delivery time, cost, and reliability allows you to make a smart decision that perfectly suits your business. With so many options for delivery speed, it’s crucial to plan ahead and select a vehicle that matches your operational timeline.

Late Super payments will trigger costly SGC for businesses warns ATO

As the 2024-25 financial year gets underway, businesses need to ensure they meet their superannuation guarantee (SG) obligations, with the first payment due by 28 October 2024. This date is a key deadline for employers to make sure their super contributions reach employees’ funds on time. Subsequent SG payment deadlines are 28 January, 28 April, and 28 July, following the usual quarterly schedule.

The ATO has stressed the importance of adhering to these deadlines. If a business misses a deadline—even by a single day—it becomes liable for the superannuation guarantee charge (SGC). The SGC not only exceeds the amount of super that should have been paid but also isn’t tax-deductible, adding a costly penalty for businesses.

One of the common reasons businesses face SGC penalties is because super payments don’t reach employees’ funds by the deadline. This can happen if businesses use a clearing house to process their payments, as they may forget to account for the extra processing time. The ATO has reminded employers that it’s the date the payment reaches the super fund—not the clearing house—that counts as the due date.

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