.. at least according to Melbourne up market Real Estate Agents Kay & Burton, in a recent post, which one of my correspondents drew to my attention (Thanks Peter!).
This is what they said in a recent posting:
Australia’s economy just hit its 27th year without a recession. That’s thanks to a jump in business investment, bumper exports, jobs growth, and an AUD that’s been doing the heavy lifting required by the RBA.
We’re entering a ‘normal market’, and the doom-and-gloom around property is not borne out by economic facts. Here’s five very good reasons why you shouldn’t worry.
- Business conditions are good: To quote Alan Oster, NAB Group Chief Economist, ‘they’re well above average’. Happy business, happy mortgage servicing economy.
- Jobs growth is firing: Local employment, a key factor, has been strong. Driven by new infrastructure projects, we’re creating more jobs than ever, with the RBA predicting we’ll see unemployment at 5% by 2020. As for the short term, jobs’ growth in August doubled expectations, and the ANZ job vacancies survey just rose to its highest-ever level.
- Strong population growth persists: With Australia’s birth rate remaining stagnant, it’s immigration that underpins our economy and housing markets, something all governments know but may be reluctant to admit. ABS estimates Australia’s population will hit 40 m by 2050. For our part, Victoria’s net annual population growth for the year to March 2018 was 137, 395 or 2.18%. All those people have to live somewhere. Supply and demand!
- Inflation is sleeping: Inflation is a key metric used by the RBA to make rate calls. Right now, it’s sleeping peacefully with little on the horizon to disturb its slumber. This will keep the cash rate low and, thankfully, the RBA Board from hitting the red rate-rise button.
- Household wealth: Most household budgets are in good shape with household wealth the highest it’s ever been. So, no rushing for the door is scheduled on that front either.
Overall, no reason for panic. Sit back, relax, and enjoy the view.
So that’s OK then!
– Whether Australia is or isn’t in a recession depends on the “change in debt”. If that “Change in debt” drops from say +2% down to say +1% then that’s the signal that Australia is in a (deep ?) recession. (Source: Steve Keen).
– Is DFA able to go through the data (from RBA ?, ABS ?, ….. ) and see what happens to the “change in debt” currently ? Or perhaps this propriatary DFA information ?
The text obviously misses to note a “Caveat Lector” as a disclaimer.
Oh, and that one where they say something along the lines of ‘we have no clue about economy past how it reflect on the RE and we are not qualified neither we have researched the topic in any depth’.
With a note that “Sit back, relax, and enjoy the view.” is a good advice for one small group of folks that exit(ed) the market in time.