ABS says Boom!

GDP grew 3% last year according to the ABS. That's a stunner.

On that note, I don't think the RBA will cut any further. They are confident the rate cuts of last year was enough.

 

Things are nowhere near as bad as some would like atm, anyway.

 

I think I saw they're keeping them at 2%.

 

And we might see it remain at 2% for the next 3 years.
If things stary as they are. (That's a big caveat.)

The GDP data certainly exceeded the RBA expectations.

 

I don't think they will.
But everything is constantly changing.

 

The most interesting thing about these figures is that the property market in some places around the country is feeling pretty bad like on the west coast. I wonder how it will feel when realistic figures (much lower ones) will appear in print.

 

Gdp last quarter was revised up from memory?
Shows how strong things are in the eastern states, or that they are at least not treading water.

 

Hopefully it's spreading up the coast.

 

Things are going well on East coast, be it tourism, education, agriculture, real estate generally, consumer goods. The only people struggling are primary manufacturers and miners.

 

Just gotta get that tourism back in full flight. Apparently the Chinese tourists are set to double in number every year, or something like that.
A lot of people exiting stage right and headed to the east from whence they came. Rents ok in Sydney for now but winter could see Qlders once again cursing all the migration into their piece of paradise just like the old days. That's my prediction.

 

According to SHM report interest rates may have to be lowered below 2% if the Oz dollar keeps going up (currently 74c)

What can stop the Aussie dollar's surge?

 

I reckon don't lower the interest rate and the AUD for that purpose. It's currently nowhere near the 1.08 USD like it was before. I think Australia's growth and economy is ok, and where the dollar is now is ok. Not too low and not too high.

I'd see a lot of pain in the future if interest rates went down, people are taking out massive $1mill+ mortgages in Sydney.

Sydney's house prices will rise again on the back of low interest rates. So with another massive increase in Sydney's house prices.... people aren't going to pay them off in 10 years, surely? What happens if the interest rates went up? Massive stagnation or worse....

Or will all countries be locked into low interest rates forever?

Business investment should be incentivised but only a proportion of people want to be in business.

 

Rates go down, house prices go up, investors bank accounts go up!

In 10 years time rents will be a lot higher than today so loan repayments will be easier. Also salary and wages will be higher.

If one is stuck in ten years then they can sell and take the profit.

Yes, we are in an era of low interest rates....and it's working because investors are making money....just spend the money so that the wheels of the economy keep turning over.

The time jump off this merry-go-round is a long way off IMO.

 

This will give the dogsbodies something to do:
"The Australian Government has committed A$300 million to finalise planning, engineering design and environmental assessments to start construction of Inland Rail."
inlandrail.artc.com.au



Inland Rail will:

• create jobs
• support the growth of existing businesses and the launch of new businesses
• make our exports more competitive
• ease congestion on our highways and through the Sydney rail network
• prevent additional wear and tear on our roads and make our roads safer
• reduce environmental emissions and fuel consumption.

 

It's not the Australian dollar going up it's the US dollar having a correction.

 

Are you sure? To me it looks like over the last month AUD is gaining against a number of currencies. Even the mighty Albanian Lek (ALL) is having problems keeping up with AUD

 

I'm not following the Albanian Lek, Kazachstan Tenge or even Ukrainian Grivna anymore. But USD fell across the board last week. The AUD is higher because USD just fell lower to commodity currencies at most, these currencies gained more than others.

 

Even if the RBA did lower interest rates there is no guarantee the banks will pass them on- for investors at least.

 

I reckon you're right.
People will be moving there over the next couple of years with the cheaper cost of living again.
And tourism will start to filter through with the dollar being lower.

 

I think rba will still to a cut. The strong AUD of late will be of concern to them I am sure.