Deposit Safety Is A Matter Of Confidence

Last week the Bank of England Governor raised the prospect of changes to the Deposit Insurance schemes which exists in many Western Economies. So we look at what he said, and consider the relative security of deposits in the banking system, in the light of recent failures, and Central Bank interventions.

For more on Deposit Bail-In see my recent posts here:

Is Deposit Bail-In A Thing In Australia? https://youtu.be/B8OC2izjKuA

Deposit Bail-In: Who’s Fact-checking The Fact-checkers? With Robbie Barwick https://youtu.be/CAXprMwMnyY

The Deposit Bail In Question… https://youtu.be/n8t-78n1Lrs

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Pop Goes The Property Investor…

Many property investors are choosing to leave the field, leading to a rise in the number of ex-investment property being listed for sale. There are many reasons why this is occurring, and we explore some of them today.

But in short, the marginal costs of borrowing on a rental mortgage have risen far faster than the rental income. And given the limited prospects of capital gains, and the removal of some offsetting perks from a tax perspective, investors are exercising their rights to quit. Another reason why rental supply is so limited, and a sign again of how broken the system is.

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Finally, APRA Gets The Message!

Concurrent with the current Regional Branch Inquiry, APRA has announced a review of its Points Of Presence Data. This is welcome, because the current data contains many inaccuracies, and we need good data to ensure adequate transparency in terms of access to banking services.

https://www.apra.gov.au/discussion-paper-adi-points-of-presence-review

You can make a submission to this review.

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Inflation Is Not Vanquished Yet!

Significant news on inflation from the US, with core inflation higher than expected and above overall inflation, as gas and fuel prices slipped back, but services inflation remained firm, alongside rents. Sufficient to confirm a likely 25 basis point hike when then FED meets next.

And in Canada, the bank there left rates at 4.5% but was more bullish, talking about rates higher for longer.

Net, net, the idea that Central Banks will be cutting this year is all but laughable!

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When Big Australia Busts Housing!

The current Government is driving migration to all time highs, and this will put more pressure on the already unbalanced housing market. Big Australia leads to pressure on infrastructure, and the need for more homes to be built, but of course it may well also put a floor on potential home price falls. As a result, it is likely this Government will be responsible for a further spiral down in housing affordability, and ever rising rents. Migration should be slowed.

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Consumer Confidence Takes A Turn For The Better (Maybe!)

The Westpac Melbourne Institute Consumer Confidences report came in stronger this month, with a considerable change in future home price trajectory. That said, I suspect the change, connected with the RBA rate pause, may be not be sustained. We will see.

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Its Edwin’s Monday Evening International Property Rant!

In the first of our international series, we compare the UK and Australian markets, as listing decline and rental property is in crisis mode.

In addition we discuss the building company failures and collapsing buildings.

More once we get the broadband operating in the UK!

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Keep Following John Adams And Martin North!

IOTP is likely to be relatively idle for the time being as Martin North relocates to the UK and John Adams continues his quest in a new way. That said, you can still follow us on our respective channels:

Walk The World (Martin) https://www.youtube.com/c/WalkTheWorldDFA @WalkTheWorldDFA
The Public Crusader (John) https://www.youtube.com/@thepubliccrusader/featured

Hopefully we will find ways to make joint shows, but meantime do not miss out following our work – and stay subscribed to IOTP for updates!

Thanks to all those who follow and support our work.

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