Is Now The Time To Get Out Of Property? – With Harry Dent

I catch up with Harry Dent ahead of our virtual seminar next week. We discussed property and gold among other things. What is his prognosis? How might we prepare? This is not specific financial advice, just a general conversation.

Harry Dent, Robert Kiyosaki and I will all be participating in an online forum on 24th May 2020. Details here: http://harrydentlive.com/

DFA has no commercial relationship with either Robert or Harry. But at this time, this is an important conversation.

Recession Depression? – The Winners And Losers: With Robert Kiyosaki

Author and Businessman Robert Kiyosaki and I discuss the upcoming financial crisis and how we might prepare.

In addition, I’m joining forces with Robert Kiyosaki and world renowned economist Harry Dent and you are invited. The 3 of us are holding an emergency livestream, titled:

The Once-in-a-Lifetime Opportunity to Make Generational Wealth From the Crash and Secure Your Future Within the Next 18 Months

Sunday, May 24th

Secure your place here: www.harrydentonline.com

Harry Dent, Robert Kiyosaki and myself will share the latest news on:

  • How to Safely Capture Big Gains from Sudden Shifts on Wall Street, Avoid Hidden Dangers & Capitalize On New Shifts in Our Economy
  • What is likely to happen as a result of the Coronavirus Pandemic and what it means for you and your financial future
  • How you could save your retirement and add hundreds of thousands of dollars to your nest egg
  • How this could be your ONE chance to catch up rapidly – and make ten times the average annual stock market gain in a single year.
  • What’s coming next… where the immediate opportunities are… and where to park your money for the longer term. 

And much, much more…

What’s more, at this 1-day livestream – you’ll get the chance to ask Harry Dent Robert Kiyosaki and myself any questions you want!

Note that DFA has NO COMMERCIAL RELATIONSHIP with either Harry or Robert. But we all believe the decisions people take in the next few months will be life changing!

Mortgage Stress Up Again In April

The latest DFA mortgage stress data, derived from our rolling household surveys reveals than an additional 100,000 households joined the cash-flow stressed in April, bringing the percentage of households to more than 38%, which equates to more than 1.4 million.

The trajectory is still set to reach more than 41% by August. Our estimates take account of the enhanced JobSeeker, JobKeeper and Bank mortgage repayment holidays. Given the ABS reported around 650-700,000 employed people have lost work since mid-March, we expected these increases to track close to our estimates.

A reminder, we define mortgage stress in cash flow terms, rather than a set proportion of income. One other factor in play is that many households relied on multiple incomes and the loss of just one is sufficient often to push people into stress. Defaults are likely to follow, but not immediately, as people draw on savings, put more on credit, or simple hunker down for a time.

Across our segments, young growing families, at more than 70%, are at risk, follower by those battling on the urban fringe. But we continue to see a growth in more affluent households also being hit.

Across the states, Tasmania contains the highest levels of mortgage stress, thanks to the over-reliance on tourism and recent price rises relative to income. Some lenders have become more cautious here, with many investors unable to secure a mortgage repayment holiday.

Across the regions we see pockets rising in regional areas, as well as the main urban centres. Mortgage stress is not just a big-city disease.

By postcode, Melbourne post code 3806, Berwick and Harkaway now leads the way with more than 7,000 households in the district under pressure. VIC figures strongly with the top 5, with 3350 Ballarat, 3030 Werribee and 3037 Sydenham all impacted. Second though behind 3806 is WA code 6030 which includes Clarkson and Tamala Park. Most of these areas are high growth development corridors, where prices and incomes are above average. Within these areas there are also a sizable number of property investors.

Finally, there are 1.7 million households in rental stress – defined again in cash flow terms. This equates to nearly 40% of all renting households. The regional variations are again quite stark with stress peaking in Canberra and the South Coast (where bush fire damage remains).

Melbourne post code 3000 recorded the highest count of rental stress, thanks to large numbers of high-rise units being built there, the loss of student and AirB&B clients and simple oversupply. But post codes in Queensland and NSW are also badly hit.

Given the trajectory of the economic downturn, we expect stress to continue to build. The most significant question is the impact of the “cliff” in September where mortgage repayments and rental default freezes, at the same time when Government support schemes all are expected to terminate. Given that the June unemployment figure will likely to 10% (the true figure much higher) and according to the RBA unemployment will remain elevated through 2021, there is little prospect of the trends reversing anytime soon, even at current low interest rates.

Individual households will need to consider cutting their losses in these circumstances and as a result we expect the supply of rental property will rise, and a hike in property to list will follow later.

This has the hallmark of a long slow” U” not a “V” shaped recovery.

China’s Silent Invasion – With Professor Clive Hamilton

Clive’s controversial new book, Silent Invasion: China’s Influence in Australia, almost went unpublished after three publishers pulled out citing fears of reprisals from Beijing. His warning that the Chinese Communist Party is engaged in a systematic campaign to exert political influence in Australia seemed vindicated before the book appeared. Published in February, Silent Invasion quickly became a best-seller and is being read in countries around the world that face a similar threat from a rising China under an increasingly authoritarian state.