• Australian shares are likely to outperform global shares, after underperforming in CY23, assisted to an extent by more attractive valuations.
  • Global equities are expected to perform in a volatile and constrained manner over the first half of the year as growth weakens and valuations are deemed less attractive than a year ago. However, as interest rate cuts start to have their impact, and bond yields drop, global shares should ultimately provide positive return. Expect slight outperformance from emerging market shares.
  • Bonds are likely to provide returns in line with their coupon or bit more, as inflation slows, and central banks cautiously cut rates.
  • Cash and bank deposits are expected to fall in the second half of the year to somewhere in the 3% range.
  • Unlisted commercial property returns are likely to be negative again due to the lagged impact of high bond yields and continued impact of WFH, however opportunities exist in other sectors.
  • Australian home prices will fall marginally on the back of customers rolling off fixed rate home loans and rise in unemployment. However, continued supply shortfall should prevent a sharper fall. Expect there to be a disparity in the degree (and direction) of price movements between major cities.
  • US dollar towards the end of CY23 started to retract against other currencies on the back of expected US Fed has finished with its aggressive campaign of interest rate increases, and we expect the pace of selling USD to increase in the first half of CY24. A$ is likely to move to US$ 0.72.
December 2023 Download Report