Society/Culture Australian Property Prices to Crash?

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Admiral Motti

All Australian
Aug 13, 2013
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So the cashrate has been cut 0.5 and ANZ are only passing on 0.25. After passing nothing from the first rate cut

Any banks actually passing on the full 0.5?
not correct, ANZ passed on 0.18% last month, and 0.25% this month.
My guess is no bank will pass on the full 0.5% over the two months, those that went down 0.25% last month will do 0.15% - 0.20%
 

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Power Raid

TheBrownDog
Oct 15, 2004
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It won’t do much. Lowe has been asking the govt to extract the digit for a while now but the symbolism of a surplus is more important that fiscal policy things moving.
the gold boom in Australia is FX driven, so to is our amazing iron ore and coal revenues

I'd far rather our industry drive the economy than a government credit card

Do you really feel a credit card is a sustainable way to run an economy? How many decades should we use a credit card before we rely on the economy itself?
 

Messenger

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the gold boom in Australia is FX driven, so to is our amazing iron ore and coal revenues

I'd far rather our industry drive the economy than a government credit card

Do you really feel a credit card is a sustainable way to run an economy? How many decades should we use a credit card before we rely on the economy itself?
You talk about the credit card like it isn’t happening already.

I think a sustainable way to run an economy is to have sufficient revenue base to provide services for the population. Govt debt (the credit card) has been increasing for a while now under our marvellous economic managers.

I’m sure the $158B in poorly targeted tax cuts is going straight on the plastic as well.

The fact that the current increase in resources price is FX driven should be a concern, should it not? Some external monetary policy changes and the advantage is gone.
 

Power Raid

TheBrownDog
Oct 15, 2004
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You talk about the credit card like it isn’t happening already.

I think a sustainable way to run an economy is to have sufficient revenue base to provide services for the population. Govt debt (the credit card) has been increasing for a while now under our marvellous economic managers.

I’m sure the $158B in poorly targeted tax cuts is going straight on the plastic as well.

The fact that the current increase in resources price is FX driven should be a concern, should it not? Some external monetary policy changes and the advantage is gone.
We should all remember a healthy economy stands up on its own, long term, not a credit card. Just because we have had piss poor economic policy for 12 years, doesn't excuse the future. In fact we need to get out debt down at some stage to have our "kitty" full, in preparation for the next big down turn which isn't far away (down turns come every 5-10 years and big ones every two to five cycles).

That however, doesn't mean we don't need to tweak fiscal and monetary policy to avoid the extremes the economy can deliver.



Just take a step back for a moment.........at our last election one party wanted to destroy our investment sector attacking long term investment classes like infrastructure, R&D, tecnology, innovation, renewables (outside of some crazy government controlled subsidies concept) etc etc.

This would have been absolute madness and resulted in the government pulling out the credit card to take up the private investment void. Fortunately we dodged that bullet.

What that does emphasise is governments role, to develop good sustainable policies to strengthen the economy and if not......just try no to F it up.



oh and mining is always returns to a cost plus business. Longer term deviations are booms ad busts and the short term anomalies are driven by drivers such as FX windfalls. So no it's not a concern.....windfalls come and go.
 

SimpkinByTheDockOfTheBay

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Aug 21, 2018
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This is instructive"

Responsible lending the biggest risk to housing recovery


So, what you're saying ANX and Aussie Home Loans is that only irresponsible lending can reinflate the bubble from here?

Righto, this will work well.
 

Juddism

Norm Smith Medallist
Apr 17, 2007
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This is instructive"

Responsible lending the biggest risk to housing recovery


So, what you're saying ANX and Aussie Home Loans is that only irresponsible lending can reinflate the bubble from here?

Righto, this will work well.
trillion $ + of owner/occupier debt (highest in the world) and they want to lend more, you cannot be serious? Sydney & Melbourne are around 40% overvalued as it is, the bubble needs to hurry up and burst.
 

SimpkinByTheDockOfTheBay

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trillion $ + of owner/occupier debt (highest in the world) and they want to lend more, you cannot be serious? Sydney & Melbourne are around 40% overvalued as it is, the bubble needs to hurry up and burst.
You've got all these Mum N Dad investors being advised that with interest rates so low NOW IS THE TIME TO BORROW and with equities falling they need to SEARCH FOR YIELD so the bubble will keep inflating for a bit yet, classic dead cat bounce.

The whole shitshow is about to fall over through - as the inverted yield curve shows - so another major correction is happening anyway, this one far bigger imo.

The "real" correction as opposed to the recent regulator imposed one.
 

sorted

Norm Smith Medallist
Aug 21, 2016
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You've got all these Mum N Dad investors being advised that with interest rates so low NOW IS THE TIME TO BORROW and with equities falling they need to SEARCH FOR YIELD so the bubble will keep inflating for a bit yet, classic dead cat bounce.

The whole s**tshow is about to fall over through - as the inverted yield curve shows - so another major correction is happening anyway, this one far bigger imo.

The "real" correction as opposed to the recent regulator imposed one.
Equities falling is too early to call. For example, with the ASX 200, a retrace was due.

The Australian economy looks weak. Unemployment is creeping up but underemployment is rising rapidly. Wage rises are stagnant apart from in the public sector. It all leads to weak household disposable income growth.

China is the big unknown factor on the Australian economy and property prices. ROI is low and the number of non-performing loans is high = high risk. The Chinese will continue to look for ways of shifting their money to low risk equities such as Australian property - basically 'anywhere but China'. It's unpredictable in that it might perpetuate the bubble like what happened with Japanese overseas investment, or be enough to keep stimulating our economy. Don't under-estimate the amount of dodgy money being pocketed by our elected officials to allow housing development and other political influence.
 

Snake_Baker

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Apr 24, 2013
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Black economy task force final report:


Government just took a bigger chunk out of your freedom.
 

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Nuggs Bunny

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Oct 12, 2015
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Black economy task force final report:


Government just took a bigger chunk out of your freedom.
fu** 'em. If there's one sector of the economy comprised of completely selfish campaigners its the assholes that deal in cash so they don't have to pay anyone or anything correctly. Not even bond salesmen are that low. Hope everyone from the iPhone repairers to the organic jam makers get lined up and marched into the sea, and I'm going to say that was a joke.
 

Royal Flush

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Feb 14, 2008
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Black economy task force final report:


Government just took a bigger chunk out of your freedom.
This is going beyond the joke, just another nuclear weapon for the lazy law enforcement agencies to juice up their briefs for conviction.

From what I heard, this bill will commence January 2020. perfect timing for the 800 criminals buying into the main event of the Aussie Millions @ $10600 AUD.

Gold 1 ounce coins will be the new currency, easy to hide and trade, and from what I gather not illegal.
 

Snake_Baker

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This is going beyond the joke, just another nuclear weapon for the lazy law enforcement agencies to juice up their briefs for conviction.

From what I heard, this bill will commence January 2020. perfect timing for the 800 criminals buying into the main event of the Aussie Millions @ $10600 AUD.

Gold 1 ounce coins will be the new currency, easy to hide and trade, and from what I gather not illegal.

It's actually about bigger issues mate.

The "black economy" is its means to sell it to the people.

We're heading for negative interest rates and a cashless society.
 

twotooto

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Sep 26, 2015
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Amazing what 3 (now 4) interest rate cuts can do.
Interest rate cuts help(ed), for sure. However, if you have a peruse through this thread(and elsewhere), calls of a crash in the vicinity of 20-30, even 40%+ were getting thrown around willy nilly. Ain't no amount of rate cuts going to stop that. I think we can say that the historic crash predicted by many 'experts' has not eventuated.
 

Ok Boomer

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Jul 27, 2015
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Interest rate cuts help(ed), for sure. However, if you have a peruse through this thread(and elsewhere), calls of a crash in the vicinity of 20-30, even 40%+ were getting thrown around willy nilly. Ain't no amount of rate cuts going to stop that. I think we can say that the historic crash predicted by many 'experts' has not eventuated.
I don't think people realised how big an impact the property market and the associated "wealth effect" had on our economic performance, including the RBA.

I think our property is ridiculously overvalued, but there is no doubt that the economy tanked a bit after the banking royal commission.
 

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