Grady Wulff

We are all guilty of having multiple subscription services, some of which we don?t even use but are too time-poor to cancel.

Now, the world of microtransactions is expanding out of the gaming world and into our everyday lives.

Traditionally known for their role in video games, microstransactions were used to unlock specific gaming features or specific user abilities.

Now, we have the likes of BMW joining the microtransaction bandwagon for the heated seats service.

From this month, new BMW car buyers will have the option to sign up to a monthly subscription service costing around US$18/month (AUD$26.05/month) in order to get heated seats in the front of their vehicles.

Other subscriptions BMW is offering through its digital stores in countries including the UK, Germany, NZ and South Africa include driver assist features for AUD$60.59/month, map package update AUD$136.77/month and IconicSounds Sport for AUD$171.40/month.

Some BMW enthusiasts have slammed the luxury car brand over the introduction of the heated seats subscription service, with some taking to social media saying: ?This is a dealbreaker for me? and ?If they want subscriptions they don?t get my business?.

BMW is not alone, with tech giant Apple reportedly eyeing a move into the subscription service model.

Details are yet to emerge of how the subscription service will operate but it is expected to cover multiple services.

In a positive signal for the company, the move has been welcomed by Apple consumers amid increased personal living costs.

While we have seen great success come from subscription-based business models in the form of Netflix and Spotify, convincing customers of subscriptions to luxury brands may prove a little more challenging.

A trip to the local servo is tipped to bring even more pain for consumers with the Australian Government?s excise fuel tax halving set to end this September.

With the price of fuel already sky high the full levy of 44.2c/l will return from September 28.

The halving of the excise fuel tax has helped ease pain at the pump in recent times but without the halved levy, Australians will bear the full brunt.

The average fuel price nationwide in the second week of July was $2.20/l, compared to just $1.42/l for the June quarter of 2021.

Australia?s watchdog is investigating a number of petrol retailers who were dobbed in for not passing on the halved 20c/l fuel excise from when it first came into effect.

The war between Russia and Ukraine as well as sanctions imposed by the US and EU has helped cut global oil supply whilst putting a rocket under global fuel prices.

Since the outbreak of the war in February, consumers have seen the price of fuel soar over 70%.

The average price of crude oil has risen from US$39.69/barrel in 2020 to US$68.17/barrel in 2021 and US$101.68/barrel in 2022.

The one-line takeaway: Fuel prices are at record highs and will hit Australian motorists even harder in September when the excise levy halving ends.

Many Aussies are currently facing a catch-22 situation in Australia?s red hot property market; whether to rent amid record high rental prices, or buy, knowing interest rates are going to continue rising.

Property purchase values are up 11.2% over the last 12 months and rental prices continue to rise, up 9.5% over the year, according to CoreLogic.

In the second quarter, Adelaide recorded the tightest rental market with just a vacancy rate of just 0.3% for houses and units in June.

Adelaide also recorded the strongest annual growth in rental prices, up 3.9% for units and 4.4% for houses over the three months to June 2022.

Melbourne on the other hand replaced Adelaide as Australia?s most affordable house rental market with the average house renting for $509 per week.

And yes, little wonder why Melbourne was recently titled the 10th most liveable city in the world for 2022.

Adding to the housing woes, national dwelling vacancy rates fell from 2.2% in June 2021, to 1.2% in June 2022 - in just another sign the housing crisis is far from over.

There hasn?t been a prolonged period of growth in rental prices like this since December 2008 when international migration was at record levels.

So why is this happening again now? International migration is again surging after the Australian government let down the hard border into the country.

The government expects overseas migration to rise from 41,000 people in 2021-22, to 180,000 in 2022-23. This will help the country?s labour shortage but will add further pressure to the nation?s already tight rental market crisis.

With experts anticipating the RBA to raise the country?s cash rate to 2% by the end of 2022, Aussies looking to buy a new home may have to beat the competition in the rental market for a while to come.

The pandemic rise of the neobanks in Australia turned into a colossal fall this week after the third and final ?true? neobank, Volt Bank, called it quits after almost 5-years in operation.

A neobank is a digital bank that operates under a banking licence, but runs through a smartphone without physical branches.

They specialise in offering cheque and savings services, and most don?t offer loan services.

While 86400 was the first neobank in Australia to offer home loans, the company?s deposit-taking licence was revoked by APRA in 2019 before NAB acquired the company mid-2021.

Neobanks were collectively worth US$34.77 billion globally in 2020 according to grand view research, as they offered higher rates to customers thanks to lower operational and overhead costs.

So why has the end of the pandemic spelled the end of neobank success in Australia?

Well, for a number of reasons.

Firstly, big banks including NAB and Bendigo and Adelaide Bank swooped in to acquire 86400 and Up neobanks respectively in a move to expand their digital offerings into the neo space.

Secondly, traditional banks are funded by customers' loans, whereas neobanks are funded by investors.

And finding investors to back technology companies post-pandemic is not an easy task (refer to Grafa?s insight piece Tech..Tech..BOOM turned BUST in 2022).

Holding a banking licence also means neobanks have regulatory capital requirements that are much higher than that of fintech companies that don?t have a banking licence.

In Volt?s case, despite having around $100m in deposits and a mortgage book around the same size, the company needed $200 million in additional capital this year in order to scale, which didn?t happen.

While investors in 86400 were fortunate to earn their investment back after NAB purchased the neobank, Volt investors won?t be so lucky.

But it?s not all sad news as fintech companies around Australia including Monoova and Wpay, rally around staff and clients of collapsed neobanks, offering employment for their abandoned workforce and other services for their clients.

The one-line takeaway: Australian neobanks are collapsing in 2022 due to investors backing away from investing in technology companies on top of high capital requirements associated with holding a banking licence.

Forget the toilet paper crisis, there?s a growing baby formula shortage and it?s spurring demand for Aussie baby formula products.

Over the 2020-2021 financial year, two thirds of Aussie babies consumed either exclusively infant formula products or a mix of breastmilk and formula.

The combination of less Aussie mums breastfeeding and US supplies drying up has caused demand for Aussie manufacturers like Bubs Australia Ltd (ASX:BUB) to skyrocket.

We first saw this supply shortage crisis in China back in 2008 when melamine was used in baby formula products that poisoned 300,000 children. What resulted? Australian shelves were cleared of baby products as supplies were bought and shipped over to China.

Now, it?s deja vu in the US as the country?s largest infant formula maker Abbott recalled products and was forced to halt production at its Michigan manufacturing plant due to a salmonella outbreak.

Call in superman? AKA Bubs Australia Ltd (ASX:BUB) who first signed three major supply agreements with the US government, Kroger & Co. and Albertsons, then signed a major deal to supply 800 Walmart stores.

While these deals pushed the Bubs share price 10% higher in a single session, on the flipside Aussie mums are growing concerned over a potential shortage of baby formula locally.

So now there really is a reason to cry over spilt milk.

The one-line takeaway: Surging demand for Australian-made baby formula products is due to a shortage in the US and Two thirds of Aussie babies consuming baby formula within the first 6-months of life.

Recent data from realestate.com.au revealed a decline in the clearance rates of auctions across the country, which for the last two years has been a strong metric in the red hot property market.

Last week, auction clearance rates fell across the country with NSW and VIC, the two states that have shown consistently strong auction numbers, dropping to 80% and 75% respectively. Queensland had a 68% rate of auction clearances last week while WA had the worst clearance rate of just 67%.

The RBA?s move to hike the country?s cash rate by 50 basis points in June is believed to be a leading factor behind the fall. Investor sentiment has turned ahead of expected interest rate hikes over the coming months.

PropTrack?s director of economic research Cameron Kusher said the cash rate had increased from zero to 2% in less than 12 months placing downward pressure on house prices. Kusher expects that price declines will likely accelerate over the remainder of this year - particularly in Sydney and Melbourne.

So just how soon will the seller?s market flip to hand buyer?s the power?

A much anticipated cooling in the cost of puppies has finally arrived in 2022.

After a pandemic-induced surge in the price of puppies in 2021, prospective dog parents will feel a little hip-pocket relief this year.

The pandemic caused supply chain disruptions, lockdowns and puppy shortages across Australia. The lockdowns in particular increased demand for puppies as Australians were forced to work from home sparking a rush of those looking to purchase a little four-legged companion to keep them company.

The price of a groodle surged 900% over the last 10-years to over $6000 in 2021. In 2022, while some breeders are still clutching on to pandemic-prices, you can pick up a groodle pup for as low as $3999 now.

Maltese x shih tzu puppies also experienced a price skyrocket during the pandemic to a high of $4200. Fast forward a year and a maltese x shih tzu puppy will cost you between $1300 and $2500.

The days of paying $2.80 for a lettuce at your local supermarket are over with customers now forking out a whopping $11.99 for the leafy green in June, 2022.

And that?s not the only grocery item putting a hole in our pockets, with broccoli also jumping from around $4/kg in January to $11.90/kg in June 2022.

Over just a few months, the prices of vegetables and fresh food produce have skyrocketed.

The price rise follows in the wake of the Queensland and Northern New South Wales floods, - events which wiped out large parts of Australia's vegetable produce.

Additionally, the war between Russia and Ukraine has caused the price of energy, fertiliser and oilseeds to rise which have increased farmers? costs of production.

Pandemic-related lockdowns in both Australia and around the world, particularly in China, has also caused supply chain constraints and disruptions to Australia?s farming industry.

Each of these factors has led to a surge in the price consumers pay for vegetables in June 2022.

The surging prices of vegetables over the last few months is rising at a rate faster than overall CPI which was 5.1% in the March quarter, while fruit and vegetable CPI growth in the March quarter of 2022 was 6.7% annually.

The price of lettuce alone has jumped from $3/lettuce head in January 2022 to $11.99/lettuce head in June 2022, a spike of 299.67%.

For consumers, the soaring price of vegetables is not expected to ease anytime soon, with farmers and growers warning the high prices could last at least 6-months.

Frozen vegetables are also expected to stay high for the foreseeable future due to scarcity of produce.

So what can we as consumers expect for the next 6-months? Not only will the price of raw vegetables increase, but our beloved Grill?d burgers or local salads may cost a few dollars extra too.

As the construction company crisis escalates with an increasing number of builders calling in the liquidators, Australian investment company REMI Capital entered voluntary administration on May 25, owing $124m.

Formerly known as C2 Capital, REMI Capital was deemed ?insolvent from inception? by administrators as the property investment firm had no income-generating assets and no auditor.

REMI Capital collapsed reportedly owing $62m to 433 investors, on top of tens of millions of dollars owed in related entity loans, secured debts, $6m to the ATO and millions more to staff and landlords.

Chris Baskerville, the administrator from Jirsch Sutherland who is in charge of REMI Capital?s case, said at a creditors meeting that ?preliminary investigations estimated only 20%-30% of investors? money was actually deployed to buy property and that the team believe ?Remi Capital Group did not complete one property project?.

Meanwhile, Australian startup Send, a grocery delivery company that promised delivery in under 10 minutes, also called in the liquidators on May 4, 2022, but for a very different reason.

A recent report showed Send spent $11m in just eight months, money raised from investors. Boasting 46,000 subscribers and availability in 46 suburbs in Sydney and Melbourne, the company employs 300 people.

Send reportedly made a total of just $8113 in October 2021, compared to a loss of more than $658,000 in the same month. In March, Send?s sales soared to $417,000, but at the same time its losses rocketed to $2.38m

Following a record year for tech start-ups in 2021, raising US$621bn in venture capital funding globally, 2022 is turning out to be a very different story.

During the pandemic, investors had more cash to splash, with many piling into ?the next big thing in tech?.

But ongoing volatility in global markets, supply chain disruptions, record fuel prices, inflationary pressures and interest rate hikes have caused investors to rethink their recent investment strategy.

As the Federal Reserve hints at ongoing interest rate hikes to address red hot inflation in the US, investors in high-growth tech firms are getting cold feet.

The Nasdaq has fallen more than 20% YTD as investors flee growth stocks in favour of stocks like financials which will benefit from higher cash rates.

With investors spending less on tech start-ups in favour of safe-havens, the valuation of tech newcomers are declining, with some venture capital investors hearing of deals being renegotiated at lower valuations.

In March there was around $830m from venture capitals that was going to local start-ups in Australia. In April, that number had more than halved to $371m? according to Matt Allen from Tractor Ventures.

So where to from here? Will the glory days of the tech startup return, or was it just a flash in the pan? Given the current economic and geopolitical pressures bearing down, don?t expect any correction soon.