Australia Faces Its Demons

[darkmarket]

46 minutes ago, zugzwang said:

Oz economy shrinks at fastest rate since the GFC. Recession ahoy?

"The ABS noted that higher-than-usual rainfall contributed to much of the decline in building activity."

It'll be fine once the weather dries up. Nothing to see here.

[spyguy]

Aus. The anglo saxonidh Nairu.

Itll fckup. China will bale it out and ship over all the labour to extract whatver.

Aussies will become a nation of bellhops, taxidrivers and prozzies.

Edited December 7, 2016 by spyguy

[Sancho Panza]

On 02/12/2016 at 4:30 AM, Kurt Barlow said:

I'm one week away from giving notice on our place in Perth. We have a friend (Single mum with a reasonable income from Ex and rental of a larger house) who is going to offer $375 (we are currently paying $450PW) with a view to going to $400PW to take the place straight over.

Will be interesting to see the response from the agent / owner.

Perth?Hasn't the bottom dropped out of it?Wouldn't she be better starting a little lower?

Edited December 7, 2016 by Sancho Panza
cut out inappropriate word

[Sancho Panza]

https://mishtalk.com/2016/12/07/australias-alternate-universe-lost-in-space-roundup/#more-42640

'

Australia suffered its worst GDP decline since the financial crisis in 2008. Economists expected a decline of 0.1% but Third Quarter GDP Declined 0.5%.

Trade data subtracted 0.2 percentage points and construction data released last week were much worse than expected. Business Investment was also weak.

Add to those concerns, a housing bubble that has been ready to pop for years, but hasn’t yet. Is now the time?

Australia last had a recession in 1991. Analysts think recessions can be avoided for something like forever.

Icing on the Recession Cake

Real Estate AU writer Michelle Hele hits the nail squarely on the head with Credit might be cheap but a fifth of these borrowers struggle to make their mortgage repayments.

'MONEY may be cheaper than ever but a fifth of young borrowers still can’t make their mortgage repayments.

And they are more in debt than any other age group by a long shot.

When mortgages, credit cards and personal loans were added up millennials, those aged between 18 and 34, owed an average of $428,000 — a massive $146,000 more than was owed by gen X and Baby Boomers.

The research done for Australian credit bureau, Experian, found many millennials were “extremely concerned’’ about the affect a 1.5 per cent increase in interest rates would have on them.

The study of more than 1500 people found gen X borrowers were also quite concerned.

Major banks moved to lift their fixed interest rates this week and analysts are now predicting potential rate rises for next year.

Experian Australia/NZ managing director Suzanne Steele said first home buyers and millennials were the most in debt generation and most likely to miss repayments on their mortgages.

“22 per cent of Australian millennials had been unable to make a mortgage repayment in the last 12 months, which is twice as many as the overall market average (11 per cent),’’ she said.

Ms Steele said one reason for the high borrowings of millennials could be their desire to meet social expectations while trying to build wealth in a market of rising house prices and low income growth.

With findings such as these, Ms Steele said there was no doubt that a rate rise would make things trickier for those looking to get their foot on the property ladder.

“We may see fewer mortgage applications from young individuals or first home buyers looking at more affordable properties.”

Despite struggles with meeting repayments millennials were keen to get their hands on credit with the generation applying for more than twice as many credit cards, mortgages and personal loans as the average gen X or baby boomer in the past 12 months.

While they may be asking for credit, they weren’t necessarily getting it, with the study finding they were more likely to be knocked back.

To help them cope with their large levels of debt more than half of the millennial mortgage holders surveyed had cut down on buying “essential items”.

More than a third took on additional hours or a second job and a similar number borrowed from friends and family.

About 17 per cent of millennials said they could not maintain their lifestyle without borrowing.'

Alternate Universe List Expanded

1. Consumer spending down
2. Housing down
3. Employment slowing
4. Wages slowing
5. Central bank not in position to help
6. Australian dollar tanking
7. Too much public debt to increase federal spending
8. Half of millennial buyers cutting back buying “essential items”
9. One third of millennials borrowing from friends and family
10. Mortgage rates rising
11. 22% of millennials unable to make mortgage payment, 11% overall unable to make payments
12. Not even half way to recession

Lost in Space Roundup

• Financial review writer Phillip Baker says “Australian Economy is Not Half Way to a Recession”
• Market Economics’ Stephen Koukoulas says “recession not likely”
• Australia’s Chief Economist Michael Blythe blames “bad weather” and the election.
• Business reporter Stephen Letts cites Koukoulas
• CNN Money writer Ben Wescott cites Koukoulas

The only person in this article who made any sense was News Corp Australia writer Michelle Hele. Congratulations!

Addendum

Reader Matthew Cleggett at Miletgi Global Investments adds.

Mish, we have had 5 year period of real wage declines. And the other big one is full time permanent jobs are disappearing. I have dozens of customers with kids in their 20’s who can only pick up 12-15 hours per week, they’ve accepted these kids have no timeline on the horizon to leave home.

Consumer confidence? Where’s that going to come from?'

[Kurt Barlow]

2 hours ago, Sancho Panza said:

Perth?Hasn't the bottom dropped out of it?Wouldn't she be better starting a little lower?

She has decided against it - her local school is A+++ whereas the one here is only A++

[Kurt Barlow]

I join the great exodus out of Perth on Sunday with a move to London. The wife follows at the end of January.

We sold all our furniture so the actual move of possessions comes to about $1100. Flights all in will be $4000 (I will fly back in late Jan to pick up Mrs B and Junior). Main hit we will take is on our car. We bought a brand new Qashqai as a wedding present for ourselves and sold our two older cars. All in  we will be taking a net hit of about $8000 but then we got 2.25 years use out of it.

[Funn3r]

5 hours ago, Kurt Barlow said:

I join the great exodus out of Perth on Sunday with a move to London. The wife follows at the end of January.

We sold all our furniture so the actual move of possessions comes to about $1100. Flights all in will be $4000 (I will fly back in late Jan to pick up Mrs B and Junior). Main hit we will take is on our car. We bought a brand new Qashqai as a wedding present for ourselves and sold our two older cars. All in  we will be taking a net hit of about $8000 but then we got 2.25 years use out of it.

Never been to Australia but it's interesting. What has happened in Perth? Is it an Aberdeen-style place where a particular single industry has gone wrong? Or is it just the general recessionary mix as listed earlier in the thread.

[Kurt Barlow]

20 minutes ago, Funn3r said:

Never been to Australia but it's interesting. What has happened in Perth? Is it an Aberdeen-style place where a particular single industry has gone wrong? Or is it just the general recessionary mix as listed earlier in the thread.

Massive resource led boom (much of it construction of plant) in Iron ore and Oil / Gas and to a lesser extent some other minerals (Gold, Bauxite, Titanium, Lithium, Copper). House prices and wages through the roof (I was on over $200K for 2.5 years) and then came the slump caused by a combination of the tailing off of the construction boom and falling commodity prices. Additional factor is that most manufacturing moved off shore or to eastern states.

[choochoo]

11 hours ago, Kurt Barlow said:

I join the great exodus out of Perth on Sunday with a move to London. The wife follows at the end of January.

We sold all our furniture so the actual move of possessions comes to about $1100. Flights all in will be $4000 (I will fly back in late Jan to pick up Mrs B and Junior). Main hit we will take is on our car. We bought a brand new Qashqai as a wedding present for ourselves and sold our two older cars. All in  we will be taking a net hit of about $8000 but then we got 2.25 years use out of it.

I left Oz 3 1/2 years ago and decided I wasn't going to pass on my forwarding details to my credit card supplier, fingers crossed but they still haven't caught up with me lol

[cashinmattress]

16 hours ago, spyguy said:

Aus. The anglo saxonidh Nairu.

Itll fckup. China will bale it out and ship over all the labour to extract whatver.

Aussies will become a nation of bellhops, taxidrivers and prozzies.

Along with a most of the commonwealth, including the UK when (if) BREXIT is realised.

[spyguy]

51 minutes ago, cashinmattress said:

Along with a most of the commonwealth, including the UK when (if) BREXIT is realised.

No.

The UK does not ave much that China wants, otherr than Hermes bags and Unis.

Of course, China will have probably had a revolution by then, as the central planning blows up in its face.

[cashinmattress]

17 hours ago, spyguy said:

No.

The UK does not ave much that China wants, otherr than Hermes bags and Unis.

Of course, China will have probably had a revolution by then, as the central planning blows up in its face

Yes. Europe and elsewhere thank the UK for their post-BREXIT 20% of GDP gift in the form of the exodus of formerly UK based banking and financial sectors.

UK has plenty of what China wants. Cheap (& soon to be cheaper) post-BREXIT London property, vast swathes of land and assets at bargain (& soon to be cheaper) post-BREXIT prices. Plus poor Britons who will gladly work  for a Chinese boss.

No. China is not heading into revolution any time soon.

Edited December 8, 2016 by cashinmattress

[bear.getting.old]

Rather strange this one. Plenty of crash newspaper articles, this doesn't normally happen if there is going to be a real crash. Usually a crash takes everyone but the select few(eg here) by surprise. I thought about moving to Oz, at one time it was a place of cheap housing but now its like London on sterioids

[steve99]

12 hours ago, Funn3r said:

 

On 12/8/2016 at 7:45 AM, spyguy said:

Aus. The anglo saxonidh Nairu.

Itll fckup. China will bale it out and ship over all the labour to extract whatver.

Aussies will become a nation of bellhops, taxidrivers and prozzies.

All the taxi drivers and most bus drivers in Melbourne now are Indians.  All the prozzies are imported from Thailand/Philippines etc (so they say). Bellhops are also from asia.   Local IT workers have been displaced and jobs filled from India or offshored to India (my wife and I are victims of this).   If you are a 25 year old 'Barrista' (coffee boy) you can still make a part time living.  
if you are tossed out of your real job now it is almost impossible to get back in, especially if you are outside of that magic 25-40 age group but even then not easy. And even if you are keen to do McJobs, as an acquaintance of mine found out the hard way when applying for a job in Bunnings (our very mega hardware store)  800 applicants for 2 part time casual jobs, no set hours.    I also applied for this company a few years ago when I was struggling and I know everything about hardware but at the same time it was around 100 applicants for 10 McPartime jobs, however I was told by the manager when he unusually and politely rang me to let me know I had not been successful. I asked him why not and apparently it was thought that I was not 'Bubbly' enough. 

And yet property buying is still in a full speculative, foaming at the mouth bubble.  This talk about uncompleted flats is almost nonsense, these flats are wholey and solely the preserve of Chinese money launderers, the real buying action by local speculators is in the suburbs where real people want to live, they are still out bidding and out buying everyone else.

On 12/1/2016 at 9:15 PM, darkmarket said:

"Melbourne Apartment Risks Mount as Prices Drop by Most Since ’14

The 3.2 percent month-on-month drop is the largest such decline since May 2014, according to figures from data provider CoreLogic Inc. This dragged down the overall increase in dwelling values across the nation’s state capitals to 0.2 percent, the smallest rise since March this year.

Record low interest rates put in place by the Reserve Bank of Australia to help ease the economy’s shift away from mining investment and combat low inflation have helped to spur a housing boom in the nation’s biggest centers and the central bank has repeatedly voiced concern that apartment gluts are developing in central Melbourne and Brisbane."

https://www.bloomberg.com/news/articles/2016-12-01/melbourne-apartment-risks-mount-as-prices-drop-by-most-since-14

That would be an annualised drop of 43% then.

''Record low interest rates put in place by the Reserve Bank of Australia to help ease the economy’s shift away from mining investment and combat low inflation have helped to spur a housing boom in the nation’s biggest centers and the central bank has repeatedly voiced concern that apartment gluts are developing in central Melbourne and Brisbane."'

The boom is in fact a 'house price' boom for us,the people, apartments being built were never intended for the local population.  Building rates for these flats did not take off after the mining infrastructure boom, they have carried on in a straight line for over a decade.

[spyguy]

8 minutes ago, steve99 said:

All the taxi drivers and most bus drivers in Melbourne now are Indians.  All the prozzies are imported from Thailand/Philippines etc (so they say). Bellhops are also from asia.   Local IT workers have been displaced and jobs filled from India or offshored to India (my wife and I are victims of this).   If you are a 25 year old 'Barrista' (coffee boy) you can still make a part time living.  
if you are tossed out of your real job now it is almost impossible to get back in, especially if you are outside of that magic 25-40 age group but even then not easy. And even if you are keen to do McJobs, as an acquaintance of mine found out the hard way when applying for a job in Bunnings (our very mega hardware store)  800 applicants for 2 part time casual jobs, no set hours.    I also applied for this company a few years ago when I was struggling and I know everything about hardware but at the same time it was around 100 applicants for 10 McPartime jobs, however I was told by the manager when he unusually and politely rang me to let me know I had not been successful. I asked him why not and apparently it was thought that I was not 'Bubbly' enough. 

And yet property buying is still in a full speculative, foaming at the mouth bubble.  This talk about uncompleted flats is almost nonsense, these flats are wholey and solely the preserve of Chinese money launderers, the real buying action by local speculators is in the suburbs where real people want to live, they are still out bidding and out buying everyone else.

''Record low interest rates put in place by the Reserve Bank of Australia to help ease the economy’s shift away from mining investment and combat low inflation have helped to spur a housing boom in the nation’s biggest centers and the central bank has repeatedly voiced concern that apartment gluts are developing in central Melbourne and Brisbane."'

The boom is in fact a 'house price' boom for us,the people, apartments being built were never intended for the local population.  Building rates for these flats did not take off after the mining infrastructure boom, they have carried on in a straight line for over a decade.

Build the houses out in the fcking desert.

And tax the Chinese at 20% purchase price a year FFS.

I wish wed stop pussy footing around on the Chinese.

A Western company cannot sell a tin of baby milk in China, never mind real estate.

 

 

[steve99]

On 12/9/2016 at 8:33 AM, spyguy said:

Build the houses out in the fcking desert.

And tax the Chinese at 20% purchase price a year FFS.

I wish wed stop pussy footing around on the Chinese.

A Western company cannot sell a tin of baby milk in China, never mind real estate.

 

 

Unfortunately 'They' like it like this cause 'They' are getting rich on Chinese money and 'They' are getting massive boosts to their property porkfolio's 

They =  

All members of LNP party cabinet, all up to their necks in property speculation etc.

State governments who make a killing with stamp duty charges on high house prices. In fact the stamp duty on an average house now is more than my parents paid for their last house in the mid 1980's

Land bankers who lobby the government, a)get the land they want and  b. ) are allowed to hoard it and drip feed it into the market.

The banks of course, goes without saying and will lend infinite amounts into BTL especially.

The local councils who practice both Nimbyism and land development at the same time, anything with enhances their own individual wealth as Councillors and council planners,ceo's etc., 

House builders who can play on the drip fed land in order to keep their house building costs high and not employ too many people, ie they can plan ahead for decades.

the collective 'They' is in charge of everything the government do. People = nothing.  Just like the UK or possibly even worse now.

 

 

[The Masked Tulip]

Former bank boss David Murray warns of disastrous property crash

 

Quote

Australia’s property market now mirrors one of the worst speculative manias in human history, according to a former Commonwealth Bank CEO.

In a televised interview that drew little media attention, David Murray warned that the entire economy is “vulnerable” because of overvalued house prices in Sydney and Melbourne.

“All the signs of a bubble are there. Many of the signs are the same as the Dutch tulips,” Mr Murray told Sky News on December 1.

 

 

http://thenewdaily.com.au/money/property/2016/12/08/david-murray-bubble/

 

 

[ChewingGrass]

On 08/12/2016 at 9:33 PM, spyguy said:

The boom is in fact a 'house price' boom for us,the people, apartments being built were never intended for the local population.

This is exactly what the Spanish indulged in. I remember being totally stunned at the shear inflexibility of the blocks of 4 storey appartments that were completely aimed at the British market even though they were 4/5 miles from the coast surrounded by scrub.

[darkmarket]

1 hour ago, The Masked Tulip said:

Former bank boss David Murray warns of disastrous property crash

 

 

 

http://thenewdaily.com.au/money/property/2016/12/08/david-murray-bubble/

 

 

The final question in that Murray interview is excellent.

"2017 in Australia. Do you think we'll do ok?"

"I...I th...well...I...I hope so."

Everything is fine.

[cashinmattress]

20 hours ago, The Masked Tulip said:

Former bank boss David Murray warns of disastrous property crash

Chinese and the rest will buy the dips. Pommies ain't got the cash now, and certainly won't when/if there is a big crash.

The the only thing that can 'rationalise' this market is the introduction of strict land owning legislation...something I think nobody is going to even put into a motion or debate through westernised democracies as it will be perceived as racist, nationalistic, etc...

Pandora is already out of the box.

Edited December 11, 2016 by cashinmattress

[spyguy]

1 hour ago, cashinmattress said:

Chinese and the rest will buy the dips. Pommies ain't got the cash now, and certainly won't when/if there is a big crash.

The the only thing that can 'rationalise' this market is the introduction of strict land owning legislation...something I think nobody is going to even put into a motion or debate through westernised democracies as it will be perceived as racist, nationalistic, etc...

Pandora is already out of the box.

Like non Chinese being able to buy chinese property?

Or an iz firm being able to export baby milk powder, and sell directly to the chinese?

Chinese-world trade is bent, and its not the world bit thats bent.

[zugzwang]

5 hours ago, cashinmattress said:

Chinese and the rest will buy the dips. Pommies ain't got the cash now, and certainly won't when/if there is a big crash.

The the only thing that can 'rationalise' this market is the introduction of strict land owning legislation...something I think nobody is going to even put into a motion or debate through westernised democracies as it will be perceived as racist, nationalistic, etc...

Pandora is already out of the box.

Unless these capital outflow rates reverse, the Chinese are mere months away from their next almighty currency devaluation.

They don't have the cash either.

[cashinmattress]

13 hours ago, zugzwang said:

Unless these capital outflow rates reverse, the Chinese are mere months away from their next almighty currency devaluation.

They don't have the cash either.

Assuming state financial forecasting is the same as individuals and corporate financial health?

Don't be so quick to poo poo the purchasing power of China's growing number of millionaires and billionaires.

Fact is they they DO have the cash. Lots of it.

If China heads for a 'crash' the outflow of currency into London, Vancouver, Australia, et al will accelerate.

In fact it is already, and has been for ages. In property, corporate & state assets, luxury items, travel, etc.. haven't you noticed?

For a country with a modernisation in the region of 4 decades, they have achieved so much.

To assume that the western hedgmon will retain leading status in light of the growth of China, India, and other developing regions is absurd.

America has it right. They have achieved and will remain on top for a while with a massive military...the big stick. But at some point that will change, perhaps in my lifetime.

Britain won't really factor in much of this. We had our chance, say until 1997 with the handover of Hong Kong.

[spyguy]

12 minutes ago, cashinmattress said:

Assuming state financial forecasting is the same as individuals and corporate financial health?

Don't be so quick to poo poo the purchasing power of China's growing number of millionaires and billionaires.

Fact is they they DO have the cash. Lots of it.

If China heads for a 'crash' the outflow of currency into London, Vancouver, Australia, et al will accelerate.

In fact it is already, and has been for ages. In property, corporate & state assets, luxury items, travel, etc.. haven't you noticed?

For a country with a modernisation in the region of 4 decades, they have achieved so much.

To assume that the western hedgmon will retain leading status in light of the growth of China, India, and other developing regions is absurd.

America has it right. They have achieved and will remain on top for a while with a massive military...the big stick. But at some point that will change, perhaps in my lifetime.

Britain won't really factor in much of this. We had our chance, say until 1997 with the handover of Hong Kong.

I think the Chinese millionaire and billionaires, bar the odd one or two, tend to have other peoples cash.

Its really hard to tell. Economic figures are state secrets in China. You know, superior planned economy and all that.

It would be unpatriotic to remove hard cash from China..... 

Why would anyone but a traitor want to invest in a less superior economic system?

[Sancho Panza]

Brisbane down

 

http://www.couriermail.com.au/news/queensland/reiq-december-2016-data-shows-fall-in-brisbane-property-prices/news-story/f4e87acf3dacbfdf7a2d691e8b62707b?nk=d10f3abd3e1ce37e84560b3a116bd9fa-1481753017

'BRISBANE home prices have taken a hit as a slide in demand and a flood of new units impact the city’s property market, according to the latest data from Real Estate Institute Queensland (REIQ).

Median house prices fell 1.6 per cent in the September quarter, compared to the previous three months, though prices are still up 4.1 per cent compared to the same time last year.

However, the median unit price of $440,000 is down 1.1 per cent compared to 12 months earlier after dropping 2.7 per cent during the quarter.'

Edited December 14, 2016 by Sancho Panza