We put together the lending and property price data released today, as we highlight the strong relationship between price movements and credit availability. The ABS shows new lending is down significantly, and prices are sliding at an accelerating rate. Go to the Walk The World Universe at https://walktheworld.com.au/
Oh September! Just The Start And Nowhere To Hide..
The markets are now sliding into September – always a weak month, and seasoned investors like Jeremy Grantham are calling it, more slides ahead. When you look at what the FED has said, it is highly likely – that is until (if) they change track (again).
Until then, there is simply nowhere to hide. Note, they have provided no explanation of why they got past calls so wrong, so why should we believe them this time?
Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Growth In Credit Eases Back…
The credit stats from RBA and APRA to end July reveals a significant slowing in credit growth. Given this is a combination of changes in borrowing power, and competitor dynamics, some lenders are chasing investment loans, others are seeking owner occupied loans.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
FINAL REMINDER: DFA Live Q&A With Damien Klassen 8pm Sydney Tonight
Join us for a live discussion about the current state of the markets with Damien Klassen, Head of Investments At Walk The World Fund and Nucleus Wealth. You can ask a question live.
Go to the Walk The World Universe at https://walktheworld.com.au/
A Dwelling Approval Shocker…
The latest from the ABS showed a significant fall in high-rise development in July, although houses were stronger.
These are lagging indicators of property activity, and an overhang from the strong momentum earlier, when Government stimulus was juicing the market. Therefore, we should expect more falls ahead. The state by state analysts showed considerable variation.
Go to the Walk The World Universe at https://walktheworld.com.au/
Failure To Launch As Tech Drives Markets Lower…
More market weakness, as the penny drops that rates are going higher and recession risk looms. Despite some still hanging on to the belief of a Fed pivot, it seems the smart money has changed tack. This despite higher oil prices. Next couple of months will be “interesting”, as we see if the Central Bankers turn their words into actions. We will see.
Its Edwin’s Monday Evening Property Rant!
Edwin and I was joined by WA Property Manager Rob, to look at what is happening in the West, as well as our normal chat about the latest numbers, and a stunning example of development which you will simply not believe. Plus some property related pet tips.
https://www.ribbonproperty.com.au/
Go to the Walk The World Universe at https://walktheworld.com.au/
Operation Jawbone? The Jackson Hole Fall Out!
How will global investors react to the overriding message from the Central Bankers Lovin-in at Jackson Hole? Aussie markets were 2% down on Monday morning.
Federal Reserve Chair Jerome Powell’s stern message was that interest rates are going higher for longer in a painful fight against inflation. Be clear, he quashed thoughts that the trajectory of monetary tightening could soon be tempered.
Investors now see the Fed’s policy rate peaking in March at around 3.80% and pared bets on a decline in 2023. The US yield curve between the five and 30-year maturities inverted for the second time this month, while the gap between the higher two-year yield and the 10-year rate widened.
The inversions suggest the bond market anticipates a recession is the necessary sacrifice to get price pressures back under control. Though I note already, some bank economists are saying, this is all talk, because the bond market hardly reacted.
Expect to hear more on the trade-off between higher rates of inflation and higher unemployment, and whether the 2-3% targeting which has become a cornerstone of Central Bank doctrine is relevant. Meantime, other than commodities, and the USD, there is nowhere to hide – and Bitcoin came down in sympathy.
Go to the Walk The World Universe at https://walktheworld.com.au/
Retail Booms: Signals Higher Rates Ahead!
The latest preliminary retail spending figures from the ABS for July 2022 were stronger than expected, showing that despite weaker consumer confidence they are still spending.
That said, the data is not inflation adjusted, and the mortgage rate hikes had hardly begun to flow through. It does leave the RBA open to biggest (50 basis point) rate hikes in September.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Central Planners Double Down On Beating Inflation But…
Remember when the mantra from Central bankers was inflation was temporary? This was still being recited late last year, despite the rapidly expanding money supply created by the reaction to COVID (which had already been expanded by the reaction to the GFC in 2007 and beyond.
Ultra-low interest rates were coupled with excessive Government fiscal support from direct payments to businesses and households, and indirect support to businesses. This combined stoked home prices, and credit growth, in an attempt to maximise employment and sheeted inflation mainly to supply chain disruptions which would sort themselves out. RBA Governor Lowe late last year said no rate rise until 2024, and only recently changed his tune.
But fast forward just 6 months, and the tone has been changed completely, with a bevy of the world’s top central bankers delivering a stern and unified message on the need to curb inflation, declaring at Jackson Hole that it is broad based, here to stay and will require their forceful action. Like lemmings, they are now all running to the “must kill off rampant inflation at all costs” exit instead.
Begs the question, were they wrong then, or are they wrong now? And whilst they plan to lift rates significantly higher, will it actually tame inflation or not? And what collateral damage will these rate increases cause? I for one have little confidence in the whole Central Planners and Bankers edifice. They are of course unaccountable, and unelected.