Thursday 2 February 2023

Net Worth Jan 2023

My monthly NW estimate has been updated in NetWorthShare for the end of January. Chart is in the side-bar.

My 'Stocks' figure was down -$330 (-0.11%) to $289,243 net equity The Australia and US markets were both higher during January, but in AUD terms the rise in the AUD vs USD meant the value of my 'portfolio' in AUD was flat. It is also distorted by the fact that I don't have many stock/fund investments remaining outside of super, and that for historic reasons I include the deposit and stamp duty I paid in 2019 for the investment apartment in this figure. Once 'settlement' happens (in the next week or two) I will remove this from the 'stocks' figure and include it the 'other real estate' and 'other mortgages' figures.

The value of my 'Other Assets' category (gold and silver proof coin collection, valued at bullion value only, Perth Mint unallocated gold, silver and platinum holdings, and my small art investment via Masterworks) was up slightly during January, rising $246 (0.74%) to $33,363.

Our estimated house price for January (my half) fell another $18,137 (-1.67%) to  $1,067,538 with continued weakness in the Sydney real estate market due to rising interest rates. The RBA has recently indicated that they believe inflation peaked at the end of 2022, which *might* reduce the likelihood of further interest rate rises. There are also a lot of homeowners with fixed interest rates due to revert to variable rates during 2023, which will magnify the impact of the mortgage interest rate increases that already occurred during 2022. So real estate prices could continue to be subdued during 2023, but the cycle of mortgage interest rate increases may soon end.

The value of my retirement savings increased to $1,481,706 (up $70,779 or +5.02%) during January. The $10K I transferred from one of my superannuation accounts to purchase a deferred lifetime annuity is still counted as part of the overall superannuation balance, although it won't commence providing an income stream until 2061 (if I am still alive).

Overall, my estimated NW increased to $3,183,910 during the past month - up by $52,806 (+1.69%). The valuation for the investment apartment the bank obtained during loan approval came in very low ($750K), which is a lot lower than the price ($1MM) or a recent sale for a similar unit ($1.4MM). I suspect the valuation was done based on 'similar sales' of 1-bedroom units in the suburb, which wouldn't be accurate as the suburb has a lot of 'older low rise' apartment blocks which would have different pricing compared to the latest new developments (which are 'high rise' luxury apartment complexes). So, I'll just continue to use the 'cost price' in my NW estimates until there are more 'similar sales' occurring in the suburb, so the median 1 and 2 bedroom apartment prices start to reflect the inclusion of these new developments.

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