I believe that an important factor that will be affecting...

I believe that an important factor that will be affecting discretionary stocks is the fixed-rate mortgage cliff that is looming over 1.3 million households here in Australia. Specifically, 880,000 mortgages are set to mature by the end of this year, with another 440,000 in the coming year. It's worth noting that the average rental yield in Australia is $3,300 per month, while the average loan amount is $780,000. Prior to the COVID-19 pandemic, those with fixed loans were paying $3,000 per month on their mortgages, relieving landlords from having to worry about additional expenses for their investments.


However, the scenario has changed drastically. With the current circumstances, landlords find themselves paying $4,800 per month, resulting in an additional burden of $1,800 each month. This situation affects a significant portion of the Australian population, including owner-occupiers, first-time homebuyers, and a majority of investors. Although this discussion may not be strictly related to the property sector, it does raise an important question: if a large percentage of the population is already struggling to meet their mortgage payments due to increased costs, how likely are they to spend on retail fashion?

Considering the financial strain caused by these higher mortgage expenses, it becomes evident that individuals may have limited discretionary income available for non-essential purchases. This economic reality warrants our attention and highlights the potential impact on the retail fashion industry.