🦘 Australian Rent Prices Hit New Record

G’day everyone!

Here’s what we’ve got in store for you today:

• Australian Rent Prices Hit An Unwanted Record

• eBay Is Laying Off 1,000 Staff Members

• A Segment of Zip Co. Is Getting Acquired for $15.6 million

Let’s have a look at the market snapshot before jumping into the news:

Rent Roulette: Australia's Soaring Rental Prices

Australia's rental scene just hit a record-breaking moment, but its not a record that people will be happy about breaking…

Australian rents have just crossed the median $600 weekly rent mark for the first time ever.

The average Aussie household now spends a whopping 31% of its income on rent, a significant jump from 26.7% in March 2020.

With pockets feeling the pinch, the hunt for the most affordable rental suburbs in each capital city is more crucial than ever.

Let's size up the median weekly rents across the capitals.

Sydney tops the charts at a steep $745 per week, while Hobart offers a bit of a breather at $535.

Here's a quick rundown of the median rents:

• Sydney: $745

• Canberra: $651

• Perth: $630

• Brisbane: $627

• Darwin: $611

• Melbourne: $565

• Adelaide: $565

• Hobart: $535

CoreLogic's head of research, Eliza Owen, notes that while rent values spiked by 8.3% in 2023, the pace is slowing down.

Factors like increased investment lending, normalized overseas migration, and the potential for a cash rate reduction might just be the brakes the rental market needs.

So, while the rental rollercoaster continues, there might be some relief in sight.

Click ‘Read More’ below to find the most affordable suburbs in your capital city.

eBay's Tough Trim: 1,000 Jobs to Go Amid Growth Woes

eBay's hitting the brakes, announcing a workforce trim of 1,000 employees, or about 9% of its global team, as it navigates through choppy economic waters.

The e-commerce titan, not immune to the industry's recent trend of job cuts, is streamlining operations to better align with its current growth pace—or lack thereof.

CEO Jamie Iannone shared the sobering news, pointing out the mismatch between eBay's rapid hiring spree and its actual growth rate.

"Our overall headcount and expenses have sprinted ahead of our business growth," Iannone noted, emphasizing the need for organizational tweaks to enhance customer experience and efficiency.

This move places eBay in the same boat as tech giants like Google, Amazon, and others that have also pared down their workforce in January 2024.

Amidst a backdrop of declining consumer spending and a cautious Q4 outlook, eBay's decision underscores the broader tech sector's recalibration in response to economic headwinds.

Despite a profitable Q3 in 2023, with $2.5 billion in revenue and $1.3 billion in profits, eBay is on a quest for stability, shedding non-core assets like its stake in Adevinta and making strategic acquisitions like Certilogo.

Yet, challenges loom large, from legal battles to environmental concerns, making the upcoming Q4 earnings report a much-anticipated event for stakeholders eager to gauge eBay's navigational skills through these turbulent times.

Prospa Acquires Zip's SME Lending Arm for a Cool $15.6M

In a strategic move, Prospa (ASX: PGL), Australia's leading online lender for small businesses, is taking over Zip Co's (ASX: ZIP) SME lending business for $15.6 million. 

This acquisition includes all of Zip's performing Australian business loans, supporting approximately 370 small businesses with a combined loan value of about $18.4 million.

Zip Co, primarily known for its buy-now-pay-later services, decided to offload its Zip Business Capital ANZ subsidiary as part of a broader strategy to streamline operations and shut down less profitable divisions. 

This decision follows a revenue boost reported in Zip Co's latest quarterly results, showing a 26.1% increase to $225.6 million, with the Zip Business segment contributing a modest $2 million.

Prospa plans to fund this acquisition through existing financial arrangements, with the settlement expected imminently.

Greg Moshal, Prospa's CEO, highlighted the purchase as a testament to Prospa's dedication to supporting small businesses with tailored financial solutions, especially during challenging economic times.

Despite the positive outlook, investor reactions were mixed.

Prospa's shares dipped by 5.26% to $0.36, while Zip Co saw a 4.23% increase to $0.74.

This acquisition comes at a time when both companies are navigating through economic uncertainties, with Prospa focusing on improving loan book credit performance and exploring growth avenues amidst a challenging business lending environment.

That’s All!

If you’ve read all the way up to here, we just wanted to let you know that you’re an absolute legend!

Time to go to work and show off how clued up you are about what’s going on in the business world 💪

Keep an eye out for tomorrow's newsletter. Until then, have an awesome day folks!