RBA’s Incompetence

RBA interest rate rise will be determined by house prices

 

Find the attached article very interesting. Chris Joye one of the leading property market bulls over the last 10 years is calling for huge declines and resulting hits to the Australian economy.

Our central bank having got it wrong on so many occasions has most likely got it wrong again here, admitting that their guidance on rates over the last 2 years has missed the mark.

2018 Prices looking more and more possible as this plays out I think.

 

"The RBA has zero interest in triggering a recession or a downturn in economic growth that would deny workers their jobs and the healthy wage growth that the RBA has been trying to stimulate. It will be very closely following the world-leading daily hedonic house price indices produced by CoreLogic, which uniquely revalue the entire 10.5 million dwelling housing stock every day using 100% of the incoming sales (as reported by agents and checked using land titles data). (Disclosure, a business I co-founded created these indices.)

As house prices start rolling over in earnest later this year, we expect the RBA to modulate the pace of its monetary policy tightening process in response to clear evidence that its transmission mechanism is working."

Wiping $1.5 trillion off house prices will force RBA to pause after 100-150 basis points of rate hikes

 

Bewdifuulll..... where is the idiot who say house medians in Sydney would get to 1.75m?

Looking at the Eastern/Inner West/Lower North Shore suburbs ... and it is coming off fast now.

West will also over correct this time... this demographic is living hand to mouth the basics for day to day is up 20%... add to that mortgage increases ..... it will get interesting.

 

I couldn't read the article, but the cash rate remains 3.4% below underlying inflation so monetary policy remains expansionary. Expect more rate rises!

 

Hindsight is always wonderful ... sadly the crystal balls don't work to well in predicting the future

 

I wouldn’t classify Joye as a bull at all, he has said prices will fall in the past and observed correctly. He has reasoned views, that adjusts as data adjusts.

agree that getting rates to 2.5% may be fantasy land.

 

Would put your proverbial on it

You were incorrect on the latest views.

Have you actually observed inflation take hold in your lifetime?

 

The RBA also needs to keep an eye on our dollar whilst balancing the local economy. It will be a very interesting 2-3 years I feel

 

Looks like peoplehave forgotten tuesdays rate rise. BOOM!

CoreLogic weekly house price update: Rebound

 

Another reason not to rely on data as it lags.

 

100,%. It is not only about inflation control but also the currency plunging which would even more inflationary. A tightrope here as you get it wrong either way and there are consequences.

If the US gets to 3% we need to be at 2.5%. Might sound conspiracy theory stuff....but the USA govt will like it as it will floor China economically.. add to their stupid Covid restrictions the CCP might have to deal with a severe economic crisis in over 50 years.

 

Joye has a good model for house prices.

 

Maybe I just thought he was a bull as he said prices would Chris’s for 5 years (which they did).

It’s good to see he is taking the measured approach this time around, as the outlook continues to look average. He has been right for a very long time so you would be wise to take note of his predictions

 

Im pretty sure he was indicating a 10% price fall in 2017-2018 too. Been a bull when it was right to be so.

 

I said it before, the RBA maybe maths genius eggheads but they should never have thought they could see into the future. They totally oversold a low interest rate environment saying rates won't increase till 2024. And it's contributed to probably 10% of the current market over inflation.

 

call him a bull, a bear, a realist, call him whatever, but hes been correct for about 10-15 years now

 

As he says, the housing market is pretty easy to predict in terms of direction. As liquidity goes in, prices go up. As it comes out, prices go down

 

House price is not solely dictated by interest rates?

If not enough dwellings are built while we increase population/migration, it's still gonna support house prices regardless of a minimal 2.5% increase in interest rates?

 

wish it were that simple