Aussies hardest hit by COVID fallout

Despite the recent scare in South Australia, Australia seems to have seen off the second wave of the coronavirus, but the financial effects are still being felt.

And while we have handled the COVID-19 pandemic as well as any other country around the world, it does appear that the impact on investments has hit Australians harder than our neighbours in the Asian-Pacific region.

A survey of 2500 Asia-Pacific investors (500 investors in each of Australia, Hong Kong, Japan, Singapore and Taiwan) by global investment company PIMCO found that 60 per cent of Australian respondents claimed the coronavirus had a negative impact on their investments.

The PIMCO APAC Investor Survey found that an average of 51 per cent of respondents across all five Asia-Pacific markets felt the virus had a negative impact on their investments.

While that news was gloomy, many more Australians expected growth in their portfolios in the coming 12 months than those who saw a further contraction.

And more Australians expected regional and national economic growth than their counterparts in the other Asia-Pacific markets.

Some good economic indicators were released on Tuesday to support this notion that Australia is already well on the road to recovery.

Firstly, the Australian Bureau of Statistics (ABS) released data that building approvals for houses rose for the fourth consecutive month in October and, seasonally adjusted, were at the highest recorded levels since February 2000.

The total number of dwellings approved rose 3.8 per cent in October in seasonally adjusted terms.

Daniel Rossi from the ABS said there were a number of factors behind the surge in housing approvals.

“Rises were recorded across all building types in October, with private sector dwellings, excluding houses, increasing 6.2 per cent and private sector houses up 3.1 per cent,” Mr Rossi said.

“The continued strong demand for detached housing follows the relaxation of COVID-19 restrictions in most states and territories.

“Record low interest rates and a range of federal and state-based incentives are also providing support for the housing sector,” he said.

The rise in total dwelling approvals was driven by large increases in New South Wales (32.1 per cent) and Western Australia (29.7 per cent).

Falls were recorded in Victoria (15.0 per cent), Tasmania (3.4 per cent), South Australia (2.4 per cent) and Queensland (0.8 per cent).

Approvals for private sector houses rose in Western Australia (37.5 per cent), Queensland (9.4 per cent) and South Australia (5.0 per cent). Meanwhile, falls were recorded in Victoria (6.9 per cent) and New South Wales (4.2 per cent).

Aside from the strong housing data, the performance of shares also skyrocketed in November, with the Australian share market recording its best month since March 1988.

The ASX finished 10 per cent higher, or more than 600 points higher, than where it was at the end of October.

The share market result is even better than the original COVID-19 bounce-back of 9.5 per cent that was recorded back in April.

How are you feeling about your investment prospects in 2021? Are you expecting further growth and recovery? Are you surprised at how quickly the market has recovered?

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Written by Ben

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