Economy ahead - Thoughts

Discussion in 'Property Market Economics' started by Lone_Wolf, 6th Mar, 2020.

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  1. Lone_Wolf

    Lone_Wolf Well-Known Member

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    Just had a briefing from an economist from a leading bank.

    In Summary
    • Cash is cheap, and will stay cheap for atleast next 5 years (start borrowing), but lending might be your issue
    • Technically a recession is ahead of us in this and next quarter, but then bouncing right back up the following once China cash injections are in place and our economy will reap in the award
    • Property market will have a short term dip followed by growth this and next year (apparently Melb by 10%?)
    • Certain industry will lose and some will gain (eg: renovations vs new purchases, travel vs health care industries
    Thoughts?
     
    Last edited: 6th Mar, 2020
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  2. Redom

    Redom Mortgage Broker Business Member

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    Sounds balanced and likely.

    Lots of unknowns with an economic/health shock like this though, so I think the degree of certainty of balanced viewpoints is much lower now.
     
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  3. Trainee

    Trainee Well-Known Member

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    Agree with the general shape, but how long until the bounce back? And what indicators would suggest whether the bounceback is soon or delayed?
     
  4. Barny

    Barny Well-Known Member

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    I'm going by masks on flights, at the moment it's about 5 people per flight wearing a mask. Soon more people will start wearing them like China.
    Once it starts a reversal then that's my indicator.
     
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  5. Barny

    Barny Well-Known Member

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    Shane Oliver news.... article from amp

    BE5A983D-4A31-4001-AD31-47111AF6C716.png
     
  6. JDP1

    JDP1 Well-Known Member

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    Yep I'd concur with this.
    Economy will sharply pick up once coronavirus is contained, just like it did after sars. No cure for sars, none needed for the economy to strongly rebound; just needs to be contained where it has limited influence. It might take a little bit longer this time because Australia isn't as strong as what we were during sars, but it will still rebound. It will also depend on China. Australian economy doesn't have the strength nor complexity nor sophistication to stand up well on its own without China (people might disagree but there is a fair amount of data to back this up..e.g. 40% of our exports are straight to China...).
     
  7. K974

    K974 Well-Known Member

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    I’ve worked , lived , developed and invested through 2 recessions , we haven’t seen once since the early 90’s and I’ll give you one bit of advice , all the so called experts will call it wrong

    Wait for phrases such as “soft landing” “ rebound” and “solid fundamentals “ which the above basically is

    all bets with the banks are about to be off .
    Massive opportunities for those with cash tho ,
     
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  8. Illusivedreams

    Illusivedreams Well-Known Member

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    What opportunities in what stocks?
     
  9. K974

    K974 Well-Known Member

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    wouldn’t have a clue , don’t know about stocks and don’t profess to
     
  10. Omnidragon

    Omnidragon Well-Known Member

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    Depends if the west contains the virus. Let’s say some of the bad predictions come true - 50% of people get infected- there’ll be an economic shock which will lead to financial shock.
     
  11. Omnidragon

    Omnidragon Well-Known Member

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    The Hk economy took a long time to rebound post SARS. Property remained depressed for a long time in HK post SARS. Also Hk was a beneficiary of a substantial concerted effort to get Chinese tourists and investors into the city, and it happened while the world’s supply chain (China) and financial systems (US/Europe) were in tact.
     
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  12. K974

    K974 Well-Known Member

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    In short term an absolute bloodbath , particularly those who have used property as security on developments

    also those who have done same for business but to a lesser extent

    huge opportunities in buying industrial equipment plant machinery that kind of thing
    For those with actual cash notes even more , the amount of stuff that will be bought on paper for one thing and balance in cash will be huge

    No time like a recession to make money (if you have it )

    massive problems in the north lakes Springfield and west end type areas and equivalent of same in other cities
     
  13. Leeroy93

    Leeroy93 Well-Known Member

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    West end? Mostly tightly held, low leverage suburb where migrant families have held for generations. You're right about the ops in industrial/machinery. I remember a mining services company that did something similar during the resources slump. Like all investing, you never really know if the timing is right...but reward doesn't exist without risk ;)
     
  14. K974

    K974 Well-Known Member

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    it was the units I was referring to in west end , those houses will be fine over medium term and possible even Short term

    Oppurtunities in these times in every sector that people work in that has physical assets , if you have physical assets in your sector and you know the industry and have The cash now is going to be a great time
     
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  15. shorty

    shorty Well-Known Member

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    The US is a shambles. They will be hit hard. Once that happens and a few airlines go under...