Chris Joye Predictions Tracker

Morrison just announced FHB can access super for deposit.
I don't think that is going to change the outcome of the election. Can't see Labor losing it from here.

 

@strongy1986 This is more like it, we have to think big,
let's raid our super first,
Once we have max that out, lets go for a $500k FHB grant
we can stretch it to a 1mn each,
once that's maxed out, Drop APRAs assessment rate to zero
once that's maxed out, Go for negative rates with unlimited QE, TFF after TFF.

I think borrowing capacity should be indexed to real inflation rate (not that mickey-mouse cpi)
and auto increase in BC should constitutionally guaranteed to every JoeTheFOMO.

 

Inverse everything you said & I agree.

The inflation is transitory camp have unfortunately been consistently wrong.

We have issues with energy prices, fertiliser cost/availability (will affect yields), logistics, China's extended shutdown.

None of which will sort itself out quickly barring a global recession.

The model Chris is using essentially just measures borrowing capacity.

I think you can't rule out APRA, reducing/removing the interest rate buffer at some point which would have the most effect.

 

Australian 10 yr bond rates usually act as the leading indicator for the cash-rate (especially when RBA is not QEing aka printing out of thin air) , it usually has a 6 months lag.
If you see in 2021, 10y bond started sniffing inflation as an issue, and started diverging heavily from cash rate.
Initially there was lot of talk of high inflation print being transitory, but that is the best case and more and more bond markets across the globe are discounting this being the case, with assumption the higher inflation may be the new black.
when I say higher inflation I am not talking about hyper inflation, I am referring to avg inflation rate(3.5-5%) not the extreme low inflation we have seen in last decade thanks to outsourcing, globalization and China.
It may come down a bit go up a bit till it finds the right balance.
Bond market is sniffing de-globalization may be the new reality and the high inflation its pricing in yields will be the cost of this de-globalization going forward.

 

I find Chris Joye one of the smartest Australian market analysts I have ever listened to. If he is bearish I am listening carefully.

This is key.

Last election we had 1 party saying nothing and the other threatening to axe negative gearing. This time is a bit different with both parties promising support measures at the bottom end.

Harnessing super to realise the Australian dream of home ownership
Helping More Australians Into Home Ownership

Then we have assessment rate tweaking, assessment rule tweaking, etc. I think they have more tools than they let on and am currently optimistic that they can finesse a decent outcome to avoid too much nastiness.

There is a huge difference between 10-15% of the top of the most overheated capital city prices at the end of a big bull run (which we have seen in last few cycles) vs a marketwide fall of 20% or more. It's certainly not a given though.

Lastly markets vs markets, some areas are priced much higher than others and some are still downright cheap. Already been discussed elsewhere.

 

"If the Libs allow first time buyers to unlock their super to buy a house, which has never been allowed before and is a real surprise, we would have to revisit our forecast for a 15-25% correction in prices after the first 100 basis points of RBA cash rate increases…"
-Chris Joye

 

Scomo's policy will put a floor for houses and units under $1.5m-$2m. May even soften markets for $2m+.

@TheSackedWiggle that 10 year graph is kinda scary. Unless wages increase +10% every year, I can't imagine the asset value decline.

 

Agree with the sentiment of this response. How much do we want to squeeze the lemon???

Also pushing out mortgage length further has progressively less impact.

 

Agree he's got some of the greatest market analysis. But I'll just leave this here for perspective:



He's been known as 'bubble boy' since 2014. If you had listened to him then, you would have fixed your home loan for 5 years at 5% in 2014 (as he'd done himself), and have been scared to buy into the start of the biggest bull runs in Australian property history. Point is he's been majorly wrong before.

 

Why do you think this? Not agreeing or disagree, just interested in your logic.

 

Thanks for that one. I probably only started following him just before the Royal Commission so hadn't seen much earlier stuff

 

He also always points out every single successful prediction he has previously made. Haven't seen too many cases of him pointing out his missteps. I think like most smart people he's probably a gun at his speciality but then is so used to been right in that niche that he expounds about everything with equal confidence. He even does estimates of military conflict.

 

1. Very large gov defecits tend to lead to demand pull inflation. Consumers may have a positive savings ratio but that's largely because the government's being going into debt in their behalf so I think there's more demand pull than consumer behaviour may indicate.


2. Depreciating AUD, lack of skilled migration etc mean that Australia will have its own bottlenecks even if the supply chain issues resolve - and that'll take a year or two at best. In any case we have our own domestic supply chain issues eg timber shortages still contributed to by recentish bushfires, restocking of cattle and sheep post droughts etc

3. Yep -100%. It's not just our cash rate that matters. But that'll affect borrowers interest rates too. Variable rates are not always tied to cash rate movements
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5. I think you're spot on. Scaring us about interest rates and a moderate decline in property prices, will probably decrease spending to an extent that the full prescription of interest rate hikes will not be needed.

Also, in the last decade RBA has repeatedly issued corrections about how it underestimated the flexibility in our participation in the labour market. I would think a lot more Australians will start working a lot more now that we are facing rising interest rates and less free candy from the government. This will help with domestically ****** cost problems.

 

He seems to be pretty good at working out the part where interest rates drop and prices rise. He's not at as good at calling the top (neither am I) so wouldn't fault him there.