Australia falls into per-capita recession

Any "investment" that mostly pay off for thanks to tax/regulation/gov/pseudo-monopolies and add very little value, I would think most investment on existing dwellings could be included ;-)

 

There is not much room to cut and I am not sure Banks would be able to pass much of it, if any (they could see their cost rising instead if AUD drop much/property crashes significantly, a pickle i would say)

Population growth is unlikely to go back to a more sustainable level, that should still stir demand up and put a floor under property IMO.

as exporter, I would LOVE a lower aud (under 0.5 in my wet dreams ;-) )

 

As i expected, rates will likely go to zero for aus like other struggling developed economies.

Just watch how china goes, 25% tariffs from america avoided for now but the 10% in place is starting to crap their economy out already.

Chinese PMI gone negative past quarter which means demand for raw material from australia will be down a lot. We are just lucky that iron ore prices had a bump recently from second vale dam collapse in brazil.

Expect things to get worse this year, not much rba can do except drop rates to zero. Which wont help much if china is not buying.

 

State Final Demand December 2018

 

As if anyone is going to take a lead from lil' ol' 'straya to globally co-ordinate a devaluing of currency markets.

our population base is less than one Chinese / Indian / USA city.

 

I think they'll wait for more data on the employment outlook before jumping to any conclusions.

Although one can probably assume if you half the growth rate from your models, that employment growth will be significantly impacted by it. The data all seems to point to very soft growth data, but strong employment data at the moment. Perhaps the employment data is a reflection of the booming H12018 data. I would assume employers take time to adjust hiring/firing decisions to the economy, so there'd be a lag there & employers would likely be now responding to a pretty sharp slowdown in growth/consumption (booming H12018, slowing H22018).

 

Only a policy level, liberals would love to make falling prices a big election agenda item but for that to happen prices will need to keep falling until election. If they could create some widespread panic around property prices, voters will think twice before voting labour in.

 

There's a massive lag.

 

if growth is slowing, the last thing voters want to do is rock the boat with more taxes.

 

The big issue in our 2 biggest cities is that house prices have doubled and since 2012 wage growth has all but disappeared .
So everyone has stopped spending.
Either you need to see big rises in wages or falling house prices or a little combination of both.
At the same time some of the tax breaks need to be wound back or removed.
It wont help people already in the game and no one is stopping you from investing , it just means some of the tax breaks will disappear.
But it will help those that will be purchasing in the future, and it will give their more spending money. so at some stage the economy will pick up again, although that may be a years away.

 

Perf' has already been waiting 4 years and is quite literally in the worst slump we've seen in living memory.

 

No shortage either of owners trying to sell.
Probably more than a few broken dreams of early retirement and just expecting houses to double every 10 years.

 

A coordinated devaluation would originate in the US.

 

Indeed, employment lags the business cycle, bigly. #covfefe

Let's Make Australia Great!

 

..... it will only get worse when Labor gets in

 

Does that mean they risk being a one term government?

Cheers,
Oracle.

 

I think things are going to slide during the next year or two, no matter who is in government. If so, and if Labor win, they will be a one-term government - come the 2022 election no amount of arguing "it's down to what we inherited" will stick.

 

It's true but only really effecting some people. Some businesses are doing ok but others are doing it tough.

 

Unlikely. Although it does depend on whether they can hold it together for a full term and also what the opposition do. Right now the future opposition are looking to be in a shambles.

 

From an entirely vested interest point of view I like the Coalition because they will keep negative gearing and don't want to make any changes with capital gains taxes for housing. However, from a policy perspective they haven't been offering much to voters apart from scaremongering the public about higher taxes.

Considering real wage growth has been virtually non-existent for many years a lot of people feel that their living standards have stalled. Many others (low income earners) believe their living standards have deteriorated as non-discretionary purchases, such as electricity have risen strongly. Does anyone remember Abbott's rhetoric about how families would save $500 a year...LOL!