HSBC Doubles Its Price-Rise Forecast for Australian Homes

Bloomberg - Are you a robot?

#gottaluvrealestate

 

Must be a bubble - we're all doomed

 

According to the economists and herd sentiment I was doomed when I started 19 years ago.

I look forward to more doom times

 

It's a robot bubble. Skynet (or is it Legion?) is coming. We're definitely doomed.

 

Also HSBC, "In December 2017, HSBC Australia chief economist Paul Bloxham predicted that Sydney house prices would rise by between 2 per cent and 4 per cent in 2018, with Melbourne property prices to rise by 7 per cent to 9 per cent".

HSBC changes view on Sydney, Melbourne housing outlook

Deutsche Bank lists the Australian Property market as one of 2020's risks to the global market. I would argue that the Australian market observes the bubble different from the inside than the rest of the world is from the outside.

Inequality tops Torsten Slok’s 20 risks to markets in 2020 – Newsroom

I suppose it depends on how much the government ends up socializing the property market through the RBA as a proxy or introducing QE.

 

Not sure why your posting a link about wealth inequality on a forum that's primarily dedicated to building wealth.

Fyi of course there's wealth inequality. There has to be. Unless everyone was putting in equal efforts, sacrifices etc not all folks will have equal bank accounts. Goes without saying.

Not looking to argue, total waste of time. Keep on keeping on buddy.

 

It's a link to the source of the Deutsche Banks risks to global markets supporting my claim of an outsiders view of the Australian property market. Inequality happens to be the first one, hence titled the hyperlink and irrelevant to my statement.

And FYI, you posted in the economics compotent of the forum. Current economic views from all perspectives are relevant.

 

If Deutsche Bank is so good at predicting then why couldn’t they see their own share price to halve so quickly.

 

I agree, relevant to the section. Whether its relevant to wealth creation its self is another story

 

I haven't seen any accurate forecast by any banks or economists as far as I can recall.

If you draw a line or a curve of the current trends, the estimates might not be that much worst.
I think our guesses are as good as theirs IMO.

 

The problem with economic forecasts is they can never take into account the emotional factors which influence RE and their investments. Fear, greed and all of the human emotions which come into play imho can never be quantified or estimated. Its only after the fact, that certain metrics will show what has/is happening, such as reduction in vacancy rates, lower SOM, Lower Percetage of Discounting, Supply/ Demand ratio changes etc. Those are pretty much the only metrics i look at for quantitative stuff as part of my DD for investing. I have totally ignored all the macro/economic/guru/global etc forecasts from day one of investing. They will only lead you astray and paralyse you.

My broken record is always, invest according to your own goals and risk profiles.

 

Too right, seen so many friends and family members falling into that trap...a couple of them had subscription to macrobusiness site... What a disaster that was for them ...

 

The problem with the inequality argument is that it tells you nothing about whether something is unjust or unfair. If someone worked harder or was more creative, or whatever, that person created more value in the market place and deserves to be paid more. Socialists fetishise inequality because free markets are able to solve basically every other problem. Inequality doesn't equal injustice, and that is why it's an intellectual cul de sac, best left alone.

 

Just to be clear, was not making an inequality argument. It just happened to be the title of the article I posted as a source for my main point.

 

Fron Deutsche Bank:

20 risks to markets in 2020

1. Continued increase in wealth inequality, income inequality and healthcare inequality.
2. Phase one trade deal remains unsigned, continued uncertainty about what comes after phase one.
3. Trade war uncertainty continued to weigh on corporate capex decisions.
4. Ongoing slow growth in China, Europe and Japan Triggering significant US dollar appreciation.
5. Impeachment uncertainty & possible government shutdown.
6. US election uncertainty; implications for taxes, regulation and capex spending.
7. Antitrust, privacy and tech regulation.
8. Foreigners lose appetite for US credit and US Treasuries following Presidential election.
9. MMT-style fiscal expansion boosts growth significantly in US and/or Europe.
10. US government debt levels begin to matter for long rates.
11. Mismatch between demand and supply in T-bills, another repo rate spike.
12. Fed reluctant to cut rates in election year.
13. Credit conditions tighten with more differentiation between CCC and BBB corporate credit.
14. Credit conditions tighten with more differentiation between CCC and BBB consumer credit.
15. Fallen angels: More companies falling into BBB. And out of BBB into HY.
16. More negative-yielding debt sends global investors on renewed hunt for yield in US credit.
17. Declining corporate profits means fewer dollars available for buybacks.
18. Shrinking global auto industry a risk for global markets & economy.
19. House price crash in Australia, Canada and Sweden.
20. Brexit uncertainty persists.

It's interesting to see how an outsider views the Australian property market, and the risks that share the same list.

 

20 is a long list.

why would number 9 on that list threaten markets?

 

MMT is uncharted territory to keep the longest bull run in history alive. Plenty of unforeseen consequences of using it. Nothing positive about a global everything bubble.

 

Couldn't be further from the truth. Out of every mid to major negative event, comes massive opportunities of a lifetime. I did most of my best buying when market sentiments were dead and fear was the pervading aroma of the day.

 

I certainly can’t pretend to have grasped the nuances of MMT. And it scares me a bit - mainly the implications for governmental power.

But at least in the short term (ie 2020, the period mentioned in the article) an “everything bubble” does not sound like a market risk but rather a market boon...
Of course in a few years it could be a different story.

but it does seem like a bit of a vague and imprecise list of “risks”, when GROWTH due to MMT is listed as a risk to the market in the next 12 months.

 

You are clutching at micro flimsy straws to try to find something to confirm your bias. The link didn't say anything about inequality affecting the Australian housing market. Inequality is listed on top of the list as a risk to the US stock market because it may or may not effect US government policy taxation and election result. Way down the list house price crashes in foreign countries MAY also be a risk for US stocks. Every thing has risk ! You have more risk of stepping in front of a bus and ending up motionless, than a housing collapse in Australia scuttling the US stock market