Property & Economic Update Seminar
- Thread starter wombat777
- Start date
Yes agree! A great and fast presenter. It would have been great to here more detail about the other capital city markets though.
(Maybe he'll focus on the specific cities at those seminars in the next few weeks )
For me as a new investor it was lots of good info and knowledge to throw in with the mix of stuff I am reading. Bought some of his books.
Any summaries ?
Cliff
Cliff
Some of the charts are on his blogspot.
http://doctorandrewwilson.blogspot.com.au
He went through 120 slides in an hour. Lightning quick, so it was difficult to take notes.
I agree, Andrew Wilson was excellent. I hope he posts the whole slideshow. The pace of his presentation was indeed frantic but here are a few of my notes:
- we have had our last mining boom
- forward indications increasingly mixed and local
- not much detail on markets other than Sydney but I was surprised to hear that he thinks there are better signs out of Canberra recently
- claims the RBA absolute cashrate floor is 1.5% before it is considered an emergency, and we won't get there
- Sydney will do 7-10% in calendar year 2015, or 2.5% pq. He is leaning towards the top end of that envelope.
- one of his graphs revealed that all markets by and large move together
- the difference Sydney is currently experiencing over other markets is due to the level of investors, making up approx 60%. FHB 6.5% (lowest ever). Changeover buyers approx 34%.
- the rise in approvals for Sydney in 2015 is nowhere near net NSW migration, indicating a further decrease in supply and therefore upward pressure on prices
- the major short term moderator of prices will be income
- believes the most immediate indicators of the housing market are auction clearance rates as well as auction volumes.
- Growth and interest rate movement will be less volatile in the future as we no longer have sudden and extreme influences such as the mining boom.
Overall very entertaining
They also had a very big focus on the affordability and sustainability link.
Instead of the typical economist that looks at house prices vs income, both Michael and Andrew looked at affordability from the mortgage payments vs income point of view (mortgage payments now very low).
If you exclude the saving up of any deposit required, or any desire to pay off the mortgage, then this can be true. And with 60%+ investor share in Sydney using equity to invest, then it probably is true to a large extent.
The drivers for house prices being demand+affordability together.
E.g. Cairo has huge demand, little housing, but no one can afford increase in price so the prices don't go up.
So the idea is that Sydney market is sustainable and will increase more because:
1. Reduced interest rates and further reductions keeping repayments affordable, assuming people have enough equity for deposits
2. Delinquent mortgages are at their lowest ever, indicating mortgages are very affordable
3. 73,000 incoming migrants per annum but only a few thousand new dwellings
My opinion - this is fine unless somehow interest rates increase. One day they WILL increase, but it could be a long time. I just hope things "stabilise" by then and don't move into a crazy bubble. I also hope the RBA stick to an interest rate floor and don't push us into deflation.
Instead of the typical economist that looks at house prices vs income, both Michael and Andrew looked at affordability from the mortgage payments vs income point of view (mortgage payments now very low).
If you exclude the saving up of any deposit required, or any desire to pay off the mortgage, then this can be true. And with 60%+ investor share in Sydney using equity to invest, then it probably is true to a large extent.
The drivers for house prices being demand+affordability together.
E.g. Cairo has huge demand, little housing, but no one can afford increase in price so the prices don't go up.
So the idea is that Sydney market is sustainable and will increase more because:
1. Reduced interest rates and further reductions keeping repayments affordable, assuming people have enough equity for deposits
2. Delinquent mortgages are at their lowest ever, indicating mortgages are very affordable
3. 73,000 incoming migrants per annum but only a few thousand new dwellings
My opinion - this is fine unless somehow interest rates increase. One day they WILL increase, but it could be a long time. I just hope things "stabilise" by then and don't move into a crazy bubble. I also hope the RBA stick to an interest rate floor and don't push us into deflation.
Correct! unless interest rate increased significantly in a very short period... then we might have a housing Collapse.
But I'm sure RBA will not make such a move.
Shortage of housing, strong population growth and all time low interest rate is the Major key driver to Sydney housing price surge.
Not sure if I'm allowed to post this link, just received the 'bonus/thankyou email' with the pdf version:
https://sk972.infusionsoft.com/app/linkClick/43913/4ad6ac4dc126db24/32125899/d4fcae643043b3d6
Thank you! Excellent slides.
Thanks for the information, it was very good if a little too Sydneycentric. Slide 90 shows that historically all other capitals follow Sydney. Brisbane and Perth were also in unison for decades price wise until the mining boom when Perth went Ballistic, it looks like it might be very slowly returning to trend but who knows?
No worries, looks like it hasn't been removed so all good.
