When does the foot come off the brake?

Afternoon fellow PC'ers

How long in your opinion will it be before the regulators take the foot off the brake and allow the banks to go back to business as usual?
This is a how long is a piece of string question, I get that, but I encourage all to share their thoughts and opinions and I welcome quotes and historical data of previous credit tightening cycles.

 

If the RC pull their heads in, we may see sooner than later. A lot will be dependent on the findings of what comes out of RC

 

Agree, I get this gut feeling however that things will get worse before they get better.

 

I think we will find out possible next week the damage from the RC.
It might be a case of forgetting to "apply the brakes" for years and now its time it has to be held down excessively over a longer time.
Or the shackles may be slowly removed during the year.
But with very little real wage growth since 2012 and then followed by a property boom in Sydney and Melbourne with record low interest rates that have not flowed through into consumer spending and pushing inflation upwards.
Even with the latest jobs data , we created more part time jobs but went backwards again in fultime jobs , and thats been happening for a few years now.

 

Yep, as I said above things will be getting worse before they get better in my opinion. I can't speak on behalf of all of Australia, but in Melbourne things have pulled up drastically. Whether it be from a fall in house prices or just a change in sentiment I have noticed a huge shift in people's attitudes towards money, more specifically spending it!
Your last point is one everyone should take note of, creating part time jobs is fantastic but I think full time job creation would play a more supportive role in boosting confidence in spending.
With interest rates already this low in Australia, where to from here for us if things indeed do get abit hairy?
Is it simply a case of loosen credit standards to get more money circulating again with a hint of responsible/sound policies (fat chance I know!) to get things going again?
I do notice however a recent rise in manufacturing! Could this be a little side dish of a weaker dollar?
One assumption I am fairly confident in making is that even with an ease in credit lending standards, it may take a while for the sentiment to turn positive again across all investment classes and also across consumer spending, if you gave someone 100k 3 years ago it would be invested or spent before it were in their hands, today you give someone that same amount and I think it would be held onto and thought about for a period of time.
Flip side to this coin is the simple fact that population is still increasing, both naturally and due to migration. With tighter lending and less developments, buildings etc coming on line, I feel as if we are just winding up the tension and creating another boom just down the line.

Excuse the long post

 

The started foot came off the brake about a year ago.

Problem is, the car's lost its momentum, there's no fuel in the tank and the Royal Commission has put a hill in the way. Things are probably going to slow down more over the next 12 months.

At some point however, the gas pedal will be pushed and the car will speed up again. It's just some other things to get through before that occurs.

 

Isn't credit harder to obtain now I.e tighter servicibility calcs etc?

 

Servicing calculators are tighter than a year ago, but that's not what I'm referring too.

The 'brake' I'm referring to is the regulatory authority APRA.