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GDP shrinks 0.5pc in September quarter

Discussion in 'Property Market Economics' started by hpresident, 7th Dec, 2016.

  1. hpresident

    hpresident Well-Known Member

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    Financial Review article

    What are people's though on this affecting housing price? I think unless this leads to a rate cut (and banks passing on) this along with the slowing economy might end the boom for melbourne and sydney.

    My outlook for Australian economy is very negative right now. I think we went from being high on mining boom to being drunk on real estate money. Now that real estate construction has slowed down I expect to see a large up tick in unemployment and decrease in consumer spending.
     
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  2. 2FAST4U

    2FAST4U Well-Known Member

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    5206.0 - Australian National Accounts: National Income, Expenditure and Product, Sep 2016

    5206.0 - Australian National Accounts: National Income, Expenditure and Product, Sep 2016

    NSW, QLD and SA were the only states where the state final demand increased. Everywhere else slid backwards and it's looking nasty for WA.
    "Western Australia State final demand decreased 3.8% in the September quarter and follows a 2.7% fall in the June quarter". And someone started a thread the other day saying WA was about to boom :rolleyes:

    Two negative quarters is officially a recession. Low wage growth, underemployment, casualisation of the labour force, and GDP per capita sliding backwards over the past couple of years all point to it.
     
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  3. 2FAST4U

    2FAST4U Well-Known Member

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  4. willair

    willair Well-Known Member Premium Member

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    If you think that Banks will go down this road,then you can watch every AGM of every bank on utube from the past few months,and there is no way that they intend to cut..
     
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  5. Kangabanga

    Kangabanga Well-Known Member

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    It's happening, mining boom ended, construction boom ended, budget deficit widening, carry trade unwinding, interest rate rising.

    Next quarter is unlikely to be pretty, could be looking at technical R word :D

    It's either a trump style infrastructure boost which will massively increase debt or some proper reforms. RBA can't do much now.
     
    Last edited: 7th Dec, 2016
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  6. MTR

    MTR Well-Known Member Premium Member

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    That is why I started a thread, Time to be Cautious.

    I have just offloaded my last development in Melb a DA, as I don't want to be stuck if and when the market turns.

    On the flip side it may be blue sky in 2017 but I have witnessed 6 cycles now and the signs are clear to me. Also, this is a property forum most will continue to be bullish... its in our nature, bless our cotton socks..
     
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  7. Scott No Mates

    Scott No Mates Well-Known Member

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    The thought is that you need to encourage spending not restrict spending. If this means running a deficit to build infrastructure and create jobs so be it as it has a much greater expansionary effect on the economy than trying to get out of a hole with a shovel by reducing income through taxes.
     
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  8. zed_kid

    zed_kid Well-Known Member

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    This might be the last bullet needed to kill sentiment. I believe that 2016 growth was all driven by sentiment. I’m talking about Syd/Melb
     
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  9. 2FAST4U

    2FAST4U Well-Known Member

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    http://www.adelaidenow.com.au/busin...s/news-story/b64d6c4e38b23aa0873d29f38d83aab3

    Yet Morrison is not coming out to fiscally stimulate the economy. Instead he wants to restrict spending whilst gifting tax cuts to big business in the HOPE (that's all it is) that it will lead to jobs and growth.

    Former PUP Senator Glenn Lazarus had this to say f the Abbott Government- "They say nothing is getting through [the Senate], but that's because most of their bills are crap. I can't believe how nasty they are at times … it seems they don't want to hurt anyone except low-income earners and people on welfare or pensions … I just wish they'd have a rethink."
     
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  10. Kangabanga

    Kangabanga Well-Known Member

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    Just look at Europe and Japan, not working. Actually main street is still pretty bad in the US, though GDP, wage growth and unemployment seem to be looking up. Expansionary policy only helps when the base of the economy is healthy.

    We seriously need a proper combination of BIG austerity measures and reforms coupled with some infrastructure stimulus that actually builds stuff that we really need properly, in time and on budget. LOL. But who's gonna do that when we still have room to get more in debt and get the "mining ATMs" to dig more and pump more stuff out of the ground. LOL...
     
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  11. hpresident

    hpresident Well-Known Member

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    Totally agree with you there.
     
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  12. Goreng Ming

    Goreng Ming Well-Known Member

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    And Mal Turnbull is still predicting more growth (despite the recent 1.5% figure quoted by ScoMO)...add to that the plan to increase immigration numbers, yet not increasing employment prospects; it is an equation that doesn't add up, to me?
     
    Last edited: 8th Dec, 2016
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  13. 2FAST4U

    2FAST4U Well-Known Member

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    Yep. GDP per capita would be even worse considering population growth. Migrants always add to GDP regardless of whether they have employment as the majority of them are self-funded.
     
  14. Kangabanga

    Kangabanga Well-Known Member

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    Migration to Australia: a quick guide to the statistics – Parliament of Australia

    Top group now comes from China and India. Whilst many of Chinese and Indians getting permanent residency visa are likely well to do and self-funded, I wonder if it's really the majority. Most times I see a migrant come as a student then gets a permanent visa, then brings their spouse over, then both of 'em start getting permanent visas for friends and family. Before you know it the whole village are Aussie residents and a few years later Citizens.In fact I know some people with exactly this plan :D

    I really do wonder with refugees and all these other permanent spouse and parental visas available, if they don't make up a majority of migrants. And even if they don't, its gonna be a big burden added on.

    IMHO well to do individuals probably would not want to really migrate here per se, they just wanna find a safe haven for their assets.
     
  15. grk349

    grk349 Member

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    Hi. Are you saying that 18 year old students have wives at home in China and India? I find this hard to believe.

    Also can you tell me more abour the "mates" permanent visa? I can't find any info about this. Thanks
     
  16. Kangabanga

    Kangabanga Well-Known Member

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    The students I am alluding to are much more mature. Many already with degrees in China which when coming to Australia aren't up to scratch so they come and do some of the easier entry degrees over here. Just go to the local Universities and check out the business class like accounting/finance and also masters classes like those for MBA ;D

    If u are interested in Permanent visas the DIBP website is very comprehensive.
    Individuals and Travellers
     
  17. radson

    radson Well-Known Member

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    Im quite confident for next year albeit with a lot of volatility on world markets. The worlds two biggest economies are doing well.We seem to be at the end of the commodities slump with Iron ore and Coal up 88% and 200% respectively.LNG volumes from new gas trains are provising income. Agriculture is up. Tourism and education are up 10% this year due to the lower dollar. NSW still has a gazillion dollars in stamp duty to spend.
     
  18. au contraire

    au contraire Member

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    I think most Aussies pay no consideration to these type of macro factors. Even on a national basis. When in Perth recently everyone was saying "the worst thing that could happen is that intesrrs rates rise". Not because they had over invested, instead because they were just hanging on to PPOR's.

    The thing for me which is most frightening is that one day I expect the government to throw their arms in the air and say "it's out of our hands". They will but we shouldnt have let it get there.
     
  19. Shawn

    Shawn Well-Known Member

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    My belief is that we are going to go into a few quiet quarters with minimal growth in Real Estate Prices across the nation and start to ramp up again in late 2018 ; early 2019.

    Yes we will go into a Recession, but I don't think anything major will happen.
    Indexed Funds tracking the Australian Index have returned minimally over the last 1 year.
    Active Managed Funds are also similar. AustralianSuper's High Growth option has returned 3.69% in the last 12 months. That's 0.64% higher then the Highest Saving Account Rate currently offered by RAMs.

    That tells you something. In a a normal market if you had a Savings Account that presented you with 3.15%, you'd expect a High Growth investment option to give you a 1 Year Return of between 5-6%
     
  20. Scott No Mates

    Scott No Mates Well-Known Member

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    Not just China. Over the last few years I have lease premises to Bangladeshi, subcontinental and African post grad students (all mature age, masters level or above and government sponsored).

    Some have gone on to buy their own properties and become valued Aussies others have returned OS to work for their sponsors.