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Here’s what you need to know today

• Australia is “not going to go close” to reaching the government target of building 1.2 million new homes by 2029. That is the assessment of Brickworks CEO Mark Ellenor, one of Australia’s largest suppliers of building materials, especially with subdued activity in NSW and Victoria. A separate report earlier this month by the Urban Development Institute of Australia forecast Australia would be 393,000 homes short of the target by 2029. (AFR)
  
  

• Australia’s latest employment numbers came in below expectations. Economists expected the economy to add 30,000 jobs in February. Rather, 53,000 jobs were lost. Another sign that businesses are doing it tough. (ABS)
  
  

• Over in the US, the Federal Reserve opted to keep interest rates steady at a range of 4.25% to 4.5%. In its commentary, the Central Bank raised concerns about the economic impact of President Trump’s policy changes but said the US economy was still “strong overall”. (CNBC)
  
  

• As Australia prepares for the pre-election budget next Tuesday, Prime Minister Anthony Albanese has promised Australians won’t pay any more than $25 for a prescription under the Pharmaceutical Benefits Scheme (PBS). The policy is expected to cost $689 million and will reduce the cost of 4-out-of-5 medicines on the PBS. (The Guardian)
  
  

• As anti-Tesla sentiment grows in the US, there has been an increase of violence against Teslas and, in some cases, Tesla owners. Cybertrucks have been set on fire, Tesla showrooms have been shot at, and a website has sprung up listing the personal information of Tesla owners. (Time | NBC News)
  
  

• The European Union has charged Alphabet with breaching its Digital Markets Act for prioritising Alphabet services on the Google Play Store and separately told Apple to give other device makers greater scope to connect to its systems. The moves will likely anger the Trump Administration, who have been focused on how foreign governments regulate US tech companies. (The Guardian)
  
  

• After resuming bombing earlier this week, the Israeli Defence Force has now resumed group operations inside the Gaza Strip. Israeli operations have started around the Netzarim corridor, a thin strip of land that cuts the territory in two. (SBS)
  
  

• Nvidia and Elon Musk’s xAI will be joining Microsoft and BlackRock’s Global AI Infrastructure Investment Partnership. Together, the partnership hopes to build $30 billion worth of data centres and AI infrastructure. (Yahoo)
  
  

• The European Union has announced a €150 billion defence fund. Notably, defence companies from the US, UK and Turkey will be excluded from the purchasing unless their home countries sign defence and security pacts with the EU. (The Guardian)

What the…?

The intersection of professional sport, business and entertainment has been exemplified by the Disney series Welcome to Wrexham that has chronicled Ryan Reynolds and Rob McElhenney’s acquisition of struggling Welsh football side Wrexham in 2021.

Now other celebrities are following the playbook. Eva Longoria is an investor in the Mexican football team Necaxa and has been working with Reynolds and McElhenney on a documentary Welcome to Necaxa.

And it won’t stop there, if Longoria’s approach works in Mexico they have already acquired a Columbian team Club Deportivo Seguros La Equidad. Although we must say, Welcome to Club Deportivo Seguros La Equidad doesn’t exactly roll off the tongue. (Bloomberg)

Investing is a lifelong journey

Here’s what you can learn today.

What exactly is Rent-vesting?

This is an excerpt from our interview with Sam Gordon, founder of Australian Property Scout (Apple | Spotify)

Alec: Let's start with rent vesting. And for people who are new to the concept, what is it? 

Sam: So reinvesting in a nutshell is, is renting where you want to live or renting instead of owning and then using the additional serviceability that you have from renting instead of owning to then go and invest. So essentially you're renting at the same time that you're investing. And so often, if people make the decision to buy where they want to live, it's a very, very expensive thing, right? 

Because obviously where you want to live is typically somewhere quite nice. And the cost to live there is very expensive. When you conversely look at how much rents are in the area compared to that mortgage cost, it's typically a significantly smaller amount. 

The caveat on this is if you're in an area that might be in the sub $1 million bracket, because a lot of a lot of locations in Australia, if you're talking six, seven, $900,000, something like that, your rent's quite similar as a dollar value, maybe six, seven, $900 a week. The ratio doesn't really work so much on that, and it still works, but the serviceability isn't huge. But when you start talking about like a one and a half, $2 million plus sort of market, the rental rates in those areas are so small compared to what the mortgage cost is per week, per month. But there's a huge imbalance. And for most capital cities now, that's kind of a nice place to live in in most capital cities around that price point. That additional left over essentially borrowing capacity or serviceability left over from renting in those areas as opposed to buying there, leaves a lot of additional borrowing to then be able to go out and build a portfolio. 

Prefer your watch this interview? All Equity Mates interviews are available in full on YouTube:

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