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Is australias economy heading off the cliff?

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Comments

  • #32
    Tigerandahalf
    Registered Users Posts: 7,811 ✭✭✭Tigerandahalf


    It won't make a difference what government is in place. The damage has already been done.

    That Steve Keen statement is interesting where he mentioned there was never so much debt since before the Great Depression.

    Wages are stagnant and people are vulnerable to interest rate rises.

    Interestingly AIB here in Ireland are offering low 10 year fixed term interest rates. Clearly they believe interest rates will have to fall further.

    It will be interesting to see where all these Chinese apt buyers got their money from - their own or borrowed from Australian banks. If the latter they could easily walk away from their debts.


  • #33
    ceekay74
    Registered Users Posts: 634 ✭✭✭ceekay74


    Tigerandahalf wrote:
    I am not sure who is get­ting the last laugh here, because as we sub­quently found out, many of those Chi­nese bor­rowed the money to buy these houses from Aus­tralian banks, using fake state­ments of for­eign income. Indeed,accord­ing to the AFR, this was not sophis­ti­cated documentation? Australian banks were being tricked with pho­to­shopped bank state­ments that can be bought online for as lit­tle as $20."

    If this is accurate, it'll be easy to walk away from.


  • #34
    Tigerandahalf
    Registered Users Posts: 7,811 ✭✭✭Tigerandahalf


    Reading online it seems the Chinese government clamped down on money leaving the country. It also seems that there is a lot of person to person lending, going away from the traditional banks.

    Moodys are predicting 10% falls for areas of Sydney for 2019 alone on top of pre 2019 falls of about 10-15%.

    An awful lot of investment mortgages are on interest only too.

    If the banks stop lending to first time buyers (fearing that the mortgage will be greater than future value) then you could have real issues.

    Interest rates are already quite low.
    The employment rate is good and steady so that will be a key indicator.


  • #35
    ceekay74
    Registered Users Posts: 634 ✭✭✭ceekay74


    Getting worse it seems...

    https://www.news.com.au/finance/economy/australian-economy/desperate-actions-to-save-our-lacklustre-meheconomy/news-story/cadc1fe16bad2c442bf433a0005ef46f


  • #36
    Tigerandahalf
    Registered Users Posts: 7,811 ✭✭✭Tigerandahalf


    ceekay74 wrote: »
    Getting worse it seems...

    https://www.news.com.au/finance/economy/australian-economy/desperate-actions-to-save-our-lacklustre-meheconomy/news-story/cadc1fe16bad2c442bf433a0005ef46f

    Unemployment rate is beginning to climb. Once all that apartment building grinds to a halt it will climb further.

    It will be interesting to see what approach the government takes and how markets respond to it. If they go on a big infrastructure spend will it cause issues for their debt and their ability to fund it.

    In Ireland the markets forced our hand and we had to go to Europe for a rescue.

    How much freedom do they really have to just spend?


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