Digital Finance Analytics (DFA) Blog – Page 150

FINAL REMINDER: DFA Live 8pm SYDNEY: Another Lost Decade Ahead?

Join us for a live Q&A as I discuss the risk of another lost decade with regard to the Australian economy with Leith van Onselen who writes as the Unconventional Economist at MacroBusiness. Leith has previously worked as an economist at the Australian Treasury, Victorian Treasury and Goldman Sachs. He has a strong background in economic policy and financial sector regulation. Leith holds a Bachelor of Commerce (Honours) degree from Melbourne University and a Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia (now FINSIA). Leith can also be found on twitter: twitter.com/leithvo.

You can ask a question live via the YouTube Chat.

No Santa Rally Here – Market Update 21st Dec 2021

The latest edition of our finance and property news digest with a distinctively Australian flavour.

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.

The Incredible CPI Numberwang

The ABS has annually re-weighted the Consumer Price Index (CPI) and Selected Living Cost Indexes (SLCIs) since 2018, predominantly using Household Final Consumption Expenditure (HFCE) data. Annually re-weighting the CPI ensures that the CPI basket continues to be representative of spending by Australian households.

Last week they published the proposed changes to the index, The 2021 re-weight will apply from the December 2021 quarter. The CPI will be released on 25 January 2022 and the SLCIs will be released on 2 February 2022.

No surprise then that CPI is on average understated. The question is by how much. It is a complex task to try to recompute the true CPI, and it depends on both methodology and baseline assumptions. However my quick back of the envelope estimate is the true CPI in Australia is running closer to 7%. Which means the RBA have taken interest rates way to low, an inflated housing to the max. This is another pure case of Numberwanging…

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.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

🚨BEWARE OF SCAMMERS🚨

As there are accounts impersonating Walk The World in the comments on YouTube, note that our comments will have a distinguishable verified symbol. And remember that we will never message you asking you to give us money or talk to us on other platforms such as WhatsApp or Telegram

Why Central Banks Cannot Let Home Prices Slide!

Central Banks have created a monster, thanks to ultra-low interest rates, easy lending rules, and backed by Government stimulus. That monster is high house prices, the growth of which has accelerated through the Pandemic, with New Zealand, Australia, and the UK at the top of the charts.

As a result, banks have lent big, with larger mortgages and a greater share of lending going to the housing sector. APRA recognised the risks in mortgage lending by lifting the so called buffer rate back in October, reducing the amount borrowers can obtain, by a maximum of around 6%. It is obvious risks are rising, as now interest rates are turning higher – the Bank of New Zealand has already lifted strongly, and the Bank of England lifted this past week.

But that creates a problem, in that of home prices start easing, the so-called wealth effect is reversed and people spend less, while if prices slide the banks’ balance sheets get hollowed out and more capital which is costly is needed, to the point they might ease back on new lending.

And of course, for first time buyers who have recently grabbed larger mortgages, negative equity haunts as an outcome. So, we think Central Banks will do their most to try to keep prices up, and growing, despite the debt overhang.

The UK is a good case study. U.K. house prices probably will struggle to rise in 2022 after two strong years of increases, one of the nation’s largest mortgage lenders said.

Go to the Walk The World Universe at https://walktheworld.com.au/

The Witches, Virus, Central Bank Volatility Dance – Market Update 18th December 2021

Wall Street finished lower on Friday, weighed down by Big Tech as investors worried about the Omicron coronavirus variant and digested the Federal Reserve’s decision to end its pandemic-era stimulus faster.

Stock moves were magnified by intense activity in the options market, potentially making Friday one of the busiest trading days of the year due to the S&P Dow Jones Indices quarterly re-balance, which comes into effect after markets close on Friday. It is also “quadruple witching” day in U.S. markets, when options and futures on indexes and equities expire. With options expiring, volume on U.S. exchanges jumped to 16.6 billion shares, far above the 11.9 billion average over the last 20 trading days on Friday.

The latest edition of our finance and property news digest with a distinctively Australian flavour.

Go to the Walk The World Universe at https://walktheworld.com.au/

Data Analytics & How It Can Help You Make Better Property Decisions (with Martin North)

Headlines dominating the property news always use two powerful words to grab the market’s attention: BOOM and DOOM. But how can you see through the data and make better property decisions based on it? Today, we have data guy and host of Walk the World Martin North to talk about the world of data analytics and the importance of data-based decisions. If you enjoy the show, do like, rate, subscribe, and share it with others!

Episode Highlights: ● “The House on the Rock” [02:50] ● The 40% drop in Australian property prices explained [04:15] ● Events that may lead to significant losses in the property market [09:49] ● How can first home buyers use data from granular level research? [13:56] ● Taking a look at mortgage stress [15:45] ● Socio-economic factors that may affect mortgage stress [20:26] ● The importance of seeing through the property data presented [26:29] ● Martin’s observations of the property market industry [29:21] ● What if you bought a property that wasn’t quite right? [33:02] ● What’s the REAL definition of affordability for first home buyers? [35:53] ● Borrowing less than what your bank can lend you [40:04] ● More people who are heading to retirement have mortgages [44:42] ● What should first home buyers know about agents? [50:36] Links from the Show: ● Walk the World YouTube Channel https://www.youtube.com/c/WalkTheWorl… ● Is Australia Ready to Reopen? – Brendan Coates https://www.theelephantintheroom.com….

About Martin: Martin North is the founder of Digital Finance Analytics, a boutique research, analysis and consulting firm that specialises in offering insight into the dynamics of the mortgage, lending, savings, payments and superannuation sectors.