Discussion in 'Property Market Economics' started by JDP1, 1st Jun, 2015.
I'm calling it with almost 100% certainty. No change tomorrow in rba rates.
Almost 100% certainty?
That like being a little bit pregnant.
I predict the sun will rise tomorrow, and later in the day the sun will set.
100% certainty. Whatever else happens, happens.
Lol...ok, ill go all the way. I can say with no doubt that rates won't go anywhere tomorrow.
Almost 100% certainty, as in ~96% certainty?
Sportsbet is paying $1.001
That wasn't a typo.
Yes, I checked that as well. Ridiculous!
methinks the good folks at sportsmen read my post first...
methinks the good folks at Sportsbet read my post first...
The solutions to all the economy's woes...
Government puts $500M on a rate change.
The economy needs a rate cut. Sure it will cause Sydneys property to bubble but means more sales, more taxes collected for state and federal govt, more people with cash to spend, more jobs etc etc.
Not raising rates will cause stagnation.
The only possible benefit that Australia would get from lowering interest rates again is to devalue our currency.
Australia's current economy can be summarised by:
-Manufacturing dying a slow horrible death
-Poor business confidence
-Historically high levels of private debt (mainly invested in housing)
-Rising unemployment + continuous deregulation of the labour market, which is resulting in decreased job security
-High youth unemployment
-Falling commodity prices
-Sluggish wage growth
"The trend estimate for buildings and structures fell 3.7% in the March quarter 2015. Buildings and structures for Mining fell 4.4%, Other Selected Industries fell 1.3% and Manufacturing fell 10.4%. The seasonally adjusted estimate for buildings and structures fell 6.5% in the March quarter 2015. Other Selected Industries fell 11.7%, Mining fell 2.8% and Manufacturing fell 41.0% in seasonally adjusted terms".
Low interest rates would ideally lead to higher borrowing by small businesses either to expand or to start up ? and thus employ new people. In reality who would want to invest in a business in this current economy!? Interest rates could be 0% and I still wouldn't start a business in this climate because there is no demand!
Given Australia's current level of household debt I'm not sure why the Government would be encouraging more speculation. Public debt is at 30% of GDP and apparently it's a crisis. Typically the Government has taken the short sighted view of privatising public assets to 'pay down the debt' not even having any regard for long term consequences. "That?s the standard technique of privatization: defund, make sure things don?t work, people get angry, you hand it over to private capital" Noam Chomsky. Nor has there been any discussion about fiscal stimulus...not because it's bad economics but because it's bad politics. Once again that's another factor leading Australia down this current path of low growth and uncertainty.
sad but true. Add to that list:
- unproductive speculative bubble in real estate
- deteriorating ToT
- no real direction...where is the vision for anything?
- Government debt blow out, leading to,
- Taxes and imposts rising
- deteriorating standards of living
We need a list of positives now to keep it balanced
The positives is that Australia still hasn't gone anywhere near fiscally stimulating the economy so there is a lot of scope to improve it.
Personally I'd like to see Australia try and become more self sufficient. However, unless there's an economic crisis or another world war I don't see that being the case. Could you imagine how successful a country like Japan would be if they had the access to the same amount of land and natural resources Australia has.
My worry - for Sydney - is; if there is a rate cut today, and it becomes the catalyst for a number of folks to think; 'Hey; the rates are so low now...I'm gunna buy me something"
I know it is already happening - but we don't want more jumping on, really. (sorry to all the Sydney CG investors here )
My worry is that they are now buying near the top, with rates at a very low point, the economy still not flash - it could end in terrible tears for many if the rates start to go back up.
I know the chances are less likely right now; but I fear many are going to be dangerously over-extended there.
Hopefully the Banks have worked this out and are moving to shift the lending criteria goalposts even further...and fast.
I don't know that this would change much - for a few weeks until the money is spent on the latest tv or Ipad, etc; yes.
But I can't see a stimulus creating many jobs for the long term.
How would they fund it? There is no money.
From my understanding; the goal is to reel in the deficit - which is still not getting reeled in by much; only a slowing down of the carnage at the moment.
The low rates are making all our collective SS existing IP's more CFP.
I'll add one more...it's also because Australia is uncompetitive in the global environment. The costs for what you get is somewhat uncompetitive. Either costs reduce ( rate cut lowers dollar and thus makes foreign investment cheaper) or increase productivity /innovation. Hence the government's drive for productivity and innovation drives...
What's happens if they go the other way,and the go up..
I'll eat my hat if they either cut or raise.
Comparison website Finder.com.au said all 34 experts surveyed in its Reserve Bank survey predicted the cash rate would remain on hold.
Good to see all 34 experts got the number right..
Separate names with a comma.