Forum Topics Macro-economic Indicators
Hackofalltrades
3 years ago

More commentary on the housing market.

https://www.livewiremarkets.com/wires/fifth-largest-increase-in-house-prices-in-160-years-will-correct-after-hikes?utm_campaign=90751&utm_content=wrap+up+email+now&utm_term=fifth-largest-increase-in-house-prices-in-160-years-will-correct-after-hikes&utm_medium=email&utm_source=campaign+monitor

Fascinating is that they say, replicating the RBA model, they end up with a 33% decline in housing prices after a permanent 100bps increase in mortgage rates, though they are only predicting a 15-25% decline themselves.

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Hackofalltrades
3 years ago

A very interesting contrasting view of why house prices are high.


I'd be curious as to anyone in the industry who can confirm the tax/red tape and local, state, and federal level.


https://www.livewiremarkets.com/wires/the-real-reason-aussie-housing-is-expensive/

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barney
3 years ago

Not helping here as I would be interested how he came up with the 40% figure of a new build being tax. He makes the claim and then just rattled on.

Also, I wonder when these apparent taxes were imposed. The implementation date would show marked increases in the prices and I think we would remember as there would have major disent in the market.

Texas may be similar in population, but that is where the similarities end. The Texan population lives across the state, not in major cities like Australia. Houston, the largest city, has a similar population to Brisbane and there are only 3 other cities with more than 1M people.

Local comparison, a block of land was recently sold 5 down the street from me. It went for almost 60% of what I think we could sell our house for.

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Hackofalltrades
3 years ago

I would be very interested to know this as well!

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Hackofalltrades
3 years ago

https://www.livewiremarkets.com/wires/future-of-house-prices-in-rba-s-hands?utm_campaign=90751&utm_content=wrap+up+email+now&utm_term=future-of-house-prices-in-rba-s-hands&utm_medium=email&utm_source=campaign+monitor

"In the AFR I write that what the Reserve Bank of Australia says these days is more-or-less meaningless: with the advent of brisk core inflation, their actions will be eventually dictated by the data.....

To put the power of cheap money in perspective, national dwelling values have risen 34 per cent since the RBA started lowering its cash rate from 1.5 per cent in June 2019 to 0.1 per cent today. What cheap money giveth, expensive money can take-away.

But there is also an inherent circularity: the RBA is not going to keep mindless lifting rates as house prices plummet, which brings us back to Lowe’s comments on the potency of monetary policy in a highly leveraged economy. The true neutral cash rate may be lower than either the market or the RBA thinks."


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Hackofalltrades
3 years ago

RBA to hold interest rates, but end bond purchases by 10th Feb.

"The Board is committed to maintaining highly supportive monetary conditions to achieve its objectives of a return to full employment in Australia and inflation consistent with the target. Ceasing purchases under the bond purchase program does not imply a near-term increase in interest rates. As the Board has stated previously, it will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. While inflation has picked up, it is too early to conclude that it is sustainably within the target band. There are uncertainties about how persistent the pick-up in inflation will be as supply-side problems are resolved. Wages growth also remains modest and it is likely to be some time yet before aggregate wages growth is at a rate consistent with inflation being sustainably at target. The Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve."


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https://www.rba.gov.au/media-releases/2022/mr-22-02.html

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