Bloomberg article -- Australian Home Loans, Confidence Rise on Rate Cuts

[BoatBoy]

Australian Home Loans, Confidence Rise on Rate Cuts

April 8 (Bloomberg) -- Australian home-loan approvals rose for a fifth month and consumer confidence jumped by the most since August, adding to signs a record round of interest-rate cuts and government handouts are boosting the economy.

The number of loans granted to build or buy homes and apartments climbed 0.4 percent in February, the statistics bureau said in Sydney today. Westpac Banking Corp.’s index of consumer sentiment gained 8.3 percent in April

In the U.S., sales of new homes unexpectedly rose in February by 4.7 percent, and factory inventories are falling. The rate of contraction in European manufacturing and services industries is slowing and new bank lending quadrupled in China in February as vehicle sales increased 25 percent

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Recession Buster
“Interest rates at these low levels and a recovery in housing construction will lead the economy out of recession, as in past cycles,” economists at Westpac, including Chief Economist Bill Evans, said today.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a.xqyOsCIx6c&refer=home

Dave

 

[MichaelW]

Hi BB,

You better be careful. All these positive factual posts will lead to you being tarred with the same "uber-bull" brush that I and Shadow seem to have been tarred with. FWIW, I agree completely that the residential property market in Australia remains a very positive investment asset category in the medium term. That view has not changed one iota in recent months. There might yet be another 6 months of nothing really exciting, but rate cuts by the RBA and massive under-supply will eventually lead to money supply explosion and a run up in residential housing prices just like the way the last recession played out.

I'm just giving it another 6-12 months to see this kick in before I get too excited. Can't see the mad fringe economists being proved right on this one...

Cheers,
Michael

 

[GIDDO]

Hi BB,

You better be careful. All these positive factual posts will lead to you being tarred with the same "uber-bull" brush that I and Shadow seem to have been tarred with...... There might yet be another 6 months of nothing really exciting, but rate cuts by the RBA and massive under-supply will eventually lead to money supply explosion and a run up in residential housing prices just like the way the last recession played out.

I'm just giving it another 6-12 months to see this kick in before I get too excited. Can't see the mad fringe economists being proved right on this one...

Cheers,
Michael

Hey Michael, I can agree with you this time around.

6-12 months would be well judged I think.

This post proves you not such a "uber-bull" as you thought. I must admit some of your posts have been over bullish by my own judgement.

You are in the right place too Sydney NSW, by all accounts that is where it will start , as usual. Good luck.

 

[jackstar]

Chief economist of J B Morgan believes FHBG leading to similar situation as US subprime, supported in part by Com Bank economist. Last night "Business Lateline" ABC. The fact that there is a house shortage becomes a little incosequential, if unemployment increases and consumers on the margins cannot afford repayments and if they cant afford repayments, they are also going to struggle to meet rent commitments.

 

[see_change]

Intersting them quoting Westpac

Gail Kelly who is pretty conservative , came out htis week, saying she expectsthings to get worse.

Cliff

 

[AUSPROP...]

this also from Westpac...

"So what evidence is there that these ‘recovery’ sectors are responding to the accommodative
conditions and thus setting the scene for positive growth in the second half of 2009?
The housing recovery arguably is already on track and the last two recessions confirm that the
housing recovery will not be derailed by rising unemployment. The first phase, a rebound in
housing finance, began last September. New lending to owner–occupiers has surged 17% over
the five months to January. Active government intervention, via cash incentives to first home
buyers, has – in contrast to past cycles – added to the upswing. The investor segment is slower
to respond, in part because tighter lending standards are delaying the recovery."