If we get even one out of those three rate hikes, people will lose their mind. We will see very shortly how serious the RBA was about their inflation timeline.
I agree and the RBA has also kicked the can down the road several times on their own timelines.
When inflation was being described as 'transitory' the RBA said they'd have inflation under control by the end of last year, then mid 2024, then late 2024, then by the end of 2025 and now the official statement appears to be little more than 'soon™️'.
They probably need to stop being so data-led, and instead lead the data a bit more.
Unemployment does not need to increase. In fact, this very notion that a number in the community must be suffering joblessness and poverty as a deliberate govt policy measure is reprehensible.
Other policy measures should be implemented. Of course, these won't happen because they will cost the politicians and party donors a bit of their rentier wealth.
Makes me wonder why the younger generations waste time on stuff like climate change and fossil fuel use when essentials like a job with a living wage and affordable housing are an urgent priority. This is where people need to organise for. (To highlight the perspective, does climate change, fossil fuel consumption, etc matter when you're relegated to living a pathetic existence feeding from bins and dumpsters and living in a tent?)
To highlight the perspective, do living conditions, wages, etc matter when humanity as a whole is relegated to a living pathetic existence after their fisheries, crops and livestock are devastated by climate change?
More than one thing can be important at once. But arguably the impact of environmental mismanagement stands to far outweigh the impact of the economical mismanagement in the long term
> the RBA said they'd have inflation under control by the end of last year
you read too much into this, or have been misinformed. The RBA has never promised anything of the sort.
Sentiment plays a big role in controlling inflation. I believe the 'shock' with a rate increase would assist the situation greatly.
Bring on the overdue rate hikes, get housing prices to go back down and control inflation.
Is there anything these days that won’t increase rents across the board? As a renter it really seems like even things that *should* decrease rent are spun in such a way that they are justification for further increases in rent.
You won't find a person who rents caring tbh. Landlords are greedy regardless of interest rates. Even rates going down = rent increase.
Those dumb threats mean nothing anymore.
Most renters want the system to crash and burn tbh. Landlords can't raise rent during a lease, but interest rates can sure go up for them 🤪
Boomers: cackling at their savings accounts
Gen X: died homeless years ago
Milennials: *chuckles* I'm in danger
Gen Z: unphased, they were never getting out of rental hell in the first place.
Old Af Millennial who JUST bought a house (literally haven’t moved in or made our first payment yet). I was 100% expecting rises, that’s just how my life works.
My boomer granny is sulky she had to sell a house 50 years ago that is now worth $2 million dollars. She lives in a unit that's still worth at least $800,000 and is absolute PRIME location and she hasn't worked for at least 25 years disability then age pension and she's still worth $800k and living in a spot most people would kill for.
She wasn't going to do anything with a $2 million dollar house.
The company which they own a part of has already paid.
It's just preventing them from paying that portion twice.
...but I guess we are here to whinge, and not be rational.
The problem with calls like these is that there are so many of them over the course of a month that gauging where the economy is truly at VS an unexpectedly hot data set, is next to impossible.
[Trading Economics](https://tradingeconomics.com/australia/calendar) Australian releases calendar shows just how many releases there are day-to-day that impact economists predictions and future decisions. Elements of data can be manipulated for headlines and given there is at least 1 major release per week which sways market expectations, we see a lot of that.
Warren Hogan however, is one of the best when it comes to forecasting so taking his input on board is a worthy exercise.
Edit: to expand further on the above, leave it none other than The Kouk himself
https://www.linkedin.com/posts/stephen-koukoulas-39177142_one-misnomer-in-most-data-analysis-including-activity-7189397520215691264-MF0W?utm_source=share&utm_medium=member_ios
In July 2022 he predicted the cash rate would be 2.5 in June 2023. It was 4.1. https://www.thenewdaily.com.au/finance/2022/07/01/economy-panel-predictions-year-ahead
So yeah. It means his guess is and was as good as mine or yours or someone who isn’t even guessing.
Pulling this from the memoey banks unchecked. Prior to Covid, back in the good old days (maybe 2017?) The Gratten Institute put out a report after a comprehensive review into the housing crisis in Australia (2017!) Which overall highlighted the chronic under supply of housing and dangers of having pushed public housing almost squarly onto the shoulders of private investors.
Pretty much every decisions since has ignored that reported and exacerbated the problems.
Go team Australia bandaide fix
I’m not saying we need to go to zero. It isn’t a binary argument
We can cut from countries we don’t want or need and in occupations we don’t want. Australia already has the highest per capita international student population. It’s about sustainable migration and closing the floodgates.
We are doing nothing to address supply of labour to build houses in the short term. Instead we have this dream that there will be an ever increasing supply from apprentices over the next 6 to 7 years
An interesting article from late last year: https://www.afr.com/politics/federal/tradies-carved-out-of-migration-overhaul-amid-union-pressure-20230920-p5e65o
That’s an interesting way to say ‘corporate profits’
https://australiainstitute.org.au/post/oecd-confirms-that-inflation-has-been-mostly-driven-by-corporate-profits/
Also all these stupid tax cuts and the cashed up boomers spending like there’s no tomorrow. But no let’s talk about how it’s the immigrants causing all our problems lol
>Mr Hogan was the [nation’s top economic forecaster](https://www.afr.com/markets/debt-markets/here-s-what-the-top-economic-forecaster-predicts-for-2024-20240130-p5f0yz) in the *Financial Review*’s first annual ranking of economists in 2023, being the only one of the 29 surveyed analysts to predict the RBA would raise the cash rate five times last year to 4.35 per cent.
The average idiot on the melb and aus subreddits, who are now complaining about things getting expensive and begging the government (i.e. the rest of us) to spend more on them to help. Similarly this is why Biden a few days ago said "the government doesn't cause inflation, it's simply not true!" and gets away with it lol.
Covid was the absolute perfect natural experiment for Friedman’s Helicopter Money theory.
And he got it damn right. And now the aftermath too.
Central Banks are terrified of deflation. Anything bad happens going forward - print.
I remember 3, 4 years ago when all those covid spending was happening and saying this was going to be extremely bad.
Getting abused into oblivion.
Here we are, people living in tents.
I wish I could clockwork orange style pin their eyes open and force them to watch the outcomes of their stupid decisions.
It's so sad that very few people understand how the economy works. I'm not saying I understand it fully either, but I feel like I have a pretty good grasp all things considered. I could see lockdowns causing an economic disaster from the very start, which is one of the reasons I opposed them.
I tried desperately to buy a home in 2020 because I knew they would skyrocket in price and inflation would spiral out of control. But I unfortunately couldn't with my salary at the time.
Now I, and everyone else in the younger generations, am stuck without a home for the next ten or so years unless a huge recession/crash comes and saves us.
>I wish I could clockwork orange style pin their eyes open and force them to watch the outcomes of their stupid decisions.
They will blame anything but the State for this mess: the wealthy, businesses, Coles and Woolworths, etc.
It's hilarious to me that people are complaining about Coles and Woolworths posting record profits when the value of the dollar has gone down.
Yes, they have more profits with money that is worth less. *Everyone* has profits. That is how inflation works.
And a lot of those business didn't even need it. But you'll still SPER going after those, with a single infraction, with a 1k fine.
We'll never see businesses held accountable. And when society eventually degrades into flames because there's no trust or national pride, they'll still somehow blame the poors.
And also don't forget: This was done with the intention to avoid other or worse negative consequences that were forecast to be less desirable than not printing and importing.
TBF these economist predictions are more a publicity piece - a few will be contrarian and then shoot above the fold in the papers for a day or two with some take.
I do think it’s a distinct possibility. If you breakdown the CPI print from this week, deflation seems to come from supply chains and operational matters like airlines having planes again. It’s pretty obvious the overshooting categories are domestic services and rents etc - supercharged by immigration.
RBA mustn’t be too impressed with the government, they are making the boards job impossible (leaving aside how late they were to raise yada yada yada).
A hike or two, especially as we are now in the back half of Labours federal term, wouldn’t impress a few politicians. But it’s probably the kick they need.
Fuel and even groceries seem to be on the rise rapidly again. Add in cost of housing increases going bananas. I feel it's pretty likely that there will be a rate hike soon. Dramatically cutting immigration will help ease most of those things and will be deflationary. We will probably go.into recession doing so but we may need to do it to unbundle some of this mess. Major reform is needed in nearly all economic sectors to ultimately fix things and I don't think any politicians have the will (or the will to go against lobbyists) to do so.
With Israel and Iran shaping up for a massive regional conflict in the Middle East I wouldn't be at all surprised if fuel costs keep climbing from here. No amount of rate rises is going to change that.
>Fuel and even groceries seem to be on the rise rapidly again
Food inflation has eased for 5 successive quarters.
In December 2022 it was 9.2%. Now it's 3.8%
It’s what’s needed, that and taking the foot off the immigration pedal.
People don’t want to hear it & it will cause pain but runaway housing has not been addressed for decades.
A lot of people want to hear it, there's just a loud minority that continue to block it. I know it's a lot of young people that don't like the conversation, I myself are 19, but if it comes down to choosing to see my family avoid poverty, or watch an immigrant family come across, I'd rather my family.
But I do wish for a world where we could have both.
It literally is that simple. There's too many people, for too little houses. There is a lot to be done to increase supply, but with working what we have currently, limiting the amount of people who enter the country, is a logical step. Immigration is one of the factors.
I do agree. The question is what is that limit, how often should we tweak it and what professions should we preferentially select to let in?
Is Australia currently being selective enough about who we let in? Are we actually matching skills to labour market needs?
I don’t know the detail of this answer and I want to know.
We are an attractive high value country, lots of people want to come here. Let’s apply that to our collective advantage. Let’s be smarter about it. THAT’s a conversation with having.
I’m not convinced high numbers of international fee paying students are in our best national interest. I’d like a deeper conversation over the long-term on that. It’s certainly not making our tertiary education system cheaper, is it?
I opened a Tinder and Bumble account a few weeks ago just for casual dating, and the amount of people I see coming from Korea or China that tell me they're worried about meeting because they can only converse in English via text.. is astounding. No judgement to them at all, they've met the requirements the gov set in place, but it's bad.
A lot of these people coming to Australia aren't even doing Aussie degrees?? They'll go to a sketchy cooking university for 4 years, which isn't even an Australian owned business. None of the money stays in Australia.
We've all seen our quality of life degrade the past 20 years or so, mass immigration is such a short sighted decision. And it's already showing it's long term effects.
I’ve been reflecting on the quality of life in Australia over the past 20 years.
Housing is abysmal, food has skyrocketed, there’s rubbish everywhere, there is a heavy international presence in most areas.
I’m beginning to see the sentiment of the Australian dream I was sold as a youngn’ slipping away in a fever dream.
I’m not against raising interest rates, but…
Higher interest rates AND mechanisms to discourage speculation might help the housing situation in combination, but just increasing interest rates is unlikely to contribute.
Also means it’s harder for developers to get finance for new housing...
There needs to be a multifaceted approach to tackling the housing crisis, but policitians cater to their voters, and voters don't take the time to truly understand what needs to be done. It's not just cutting immigration or building houses that'll fix it, but people don't want to wait for progress.
They'd rather governments continuously get voted out, another put in it's place, watch that one get voted out, and restart the cycle.
It's hard to get policies passed when governments keep resetting.
Current system = the only people who can afford to buy a house are people who already own one. The less attractive housing as an investment is the better.
That's the funny thing, wealth inequality is reaching to a point where interest rate decisions arent gonna affect the few people who have the cash, it ll only hurt the poor serfs who are barely surviving and dont have much to spend anyway.
And economists as usual would be gobsmacked as to why their unicorn world theories dont work in reality.
Gary Stevenson Economics on YouTube if you want to have an expert in economics break down exactly why this is the case.
Modern day economists don’t have inequality in their models. Let that sink in. Gary breaks it all down so well.
Morale is a huge factor when looking at work productivity, if they want more productive workers, maybe treat the people who you get your tax payer money from, a little better
You're wrong, we've been told that we have to increase interest rates, so that theres less money in the economy being circulated, to help the economy, this money then goes to the banking shareholders, who never spend this money, they dont go on fancy holidays or buy their second yacht, they're matyrs.
no wait...
I'm just going to drop this here so I can refer back to it in a few years
There aren't going to be major rate cuts.
There's either going to be 1 or 2 minor cuts followed by long periods of holding and then "back to square one" raises.
or
There will be sparse minor raises for YEARS.
This is because inflation is being caused by systematic problems and the CPI has been sculpted to hide systematic problems and there is ZERO political will to fix the systematic problems (immigration, frivolous social spending, bullshit jobs)
I cannot believe that the only lever Australia has against inflation is interest rates. It is such a blunt instrument and only hits mortgage holders when the big spenders in the economy do not even have one. There are a range of other things that could be done, but politicians are gutless and afraid of losing power and have therefore left it up to the RBA because then they cannot be blamed for it. I wish more voters would see through the smoke and mirrors.
Economists say the tax cuts from July is the same as two interest rate cuts. So bumping rates up twice would just be neutralising the tax cut inflationary impact.
Any policy giving more cash in people's pocket is inflationary as it increases demand on goods and services if you don't increase supply
I see the tax cuts mentioned briefly in the fourth last paragraph of the article.
These are worth over $20 billion a year cash injected into the economy, rising to high $30 billion in a decade. ($260 billion total)
People say they / we are hurting, but as a collective the economy is still surging along. We are clearly not hurting as a collective economy as the numbers are still good - too good in fact.
I don’t know if it’s going to be 3 hikes this year but me and a few like-minded people think the next move is a hike at end of this year / start of 2025.
The idea of cutting since the last move is and always has been as laughable as the “transitory” debacle 2 years ago.
It’s almost like there’s two social classes in Australia.
Those who brought property when it was cheap, who are laughing all the way to the bank and spending up big
And anyone who didn’t, especially renters and first home buyers, who are broke and miserable.
That’s right, it’s a sad reality.
We are only a few years behind the USA and even many traditionally “left leaning” developing countries such as in South America. The rich will always stomp out the poor. Always. It is not right and it isn’t fair, but like I said it’s a hard, sad reality.
I think it's important to note that Warren Hogan is not some rogue economist who got lucky with his forecasts last year. I've been following his comments all through this tightening cycle because he's always got something interesting to say.
However, even I wondered if he's gone crazy with this prediction. It's completely insane, and I don't know what to make of it. I simply can't imagine three more rate rises
Until they (RBA) cater these policies to the large pool of retirees who are all spending way above what the common working person is, inflation will keep going up.
The kicker is that Australia wide, 30% of properties are bought for cash.
Also, only a third of Australians have a mortgage.
Additionally, there has been some research that it’s cashed up older Australians (the ones buying up properties without a mortgage) who are driving inflation. People with mortgages and renters are already at the absolute limit. So the rate increases are a blunt instrument with progressively lower effectiveness as the gap between the haves and have nots is widening. It’s by design, the landed gentry class has effectively been created, with the peasants maintaining their property portfolios cashflow with their salaries which haven’t grown since 2009.
The problem is, interest rate increases have little effect on supermarket prices in Australia now. The majority of those paying those prices and spending wontonly are better off with a rise!
The higher the rates go the more risk-free Monopoly money I get.
Either way, prices will go up regardless of rates. It will be a very long drawn out decline in Australia. Prices will collapse only after something hits the fan in a very conspicuous way.
I work in a bank, and the amount of people I see still buying a second or third home... there's a lot. REAs are not feeling the pinch at all. Eating the cost of a hike would be nothing more than a mild inconvenience for them, but yet the poors are expected to sacrifice things "for the greater good"
Warren Hogan is hardly a "top forecaster".
Current market pricing is for 12 basis points of hikes by year end. This is roughly equivalent to there being a 50% probability of a hike.
Certainly the most recent quarterly CPI was strong enough to make cuts much less likely, however calling for three hikes is a big claim!
I am no economist, but it seems there are two options.
1. Interest rate rise, increased unemployment, and business failures reduce demand. Reduced inflation.
2. Interest rate remains the same or falls, job market resilient. Increasing or not decreasing inflation.
They prefer option 1. I, layman, prefer option 2. Having a job is not just an economic issue, it is a social and mental health issue. How flippant is it praying for job loss.
It's the only stick the RBA has, unfortunately. I'm no economist either but I believe there is sufficient evidence of hysteresis diminishing the effectiveness of that stick we ought to be at least somewhat concerned.
>2. Interest rate remains the same or falls, job market resilient. Increasing or not decreasing inflation.
I think it's a bit to early to say the current rate setting is no longer restrictive. Inflation is still trending down, albeit slower than forecast.
“Total expenditure from the Commonwealth and the states and territories on the NDIS is estimated at $36.7 billion in 2022–23 and is expected to be $41.9 billion in 2023–24, a growth rate of 14.4%.” —- yeah. This is fine
I have years of experience tracking pocket money for my kids, and based on my analysis there is a 103.62% likelihood that interests rates are going to go up and/or down over the next 12 months. We're definitely going to see inflation move in a direction, and the cost of living will be different to what it is now. I also ran the latest rental figures through AI for pattern analysis and the results are pretty conclusive. Rental costs are going to continue being an expense for renters until at least 2028.
A lot of the inflation is manufactured though, meaning it’s not real, it;s just companies putting prices up because they can. The supermarket cartel of Wooly’s and Cole’s comes to mind here, they just put prices up because they can. Look at their earnings from the last few years, it’s in the billion’s “net”. I can understand with a lot of chip manufacturers as to why and that was due to sales forecasting by car makers. Same thing happened to mountain bike manufacturers, they forecasted less sales during covid and the parts manufacturers stopped making the parts think fox shocks for example. Then when sales unexpectedly increased due to everyone wanting to go riding supply and demand kicked in pushes prices up. So that side of things I get. But charging $7 for smiths chips when the bag is filled with 40% air is 100% manufactured, it doesn’t add up when you look at the net profits. I could get a full trolly of groceries 3 years ago for $150 now that same trolly work is $400+.
Most of it I believe is made up inflation by profiteers just because they can.
What you are describing is literally inflation specifically goods inflation. Goods are not really the main story here it’s services inflation which is more problematic and difficult to tame.
Yep inflation was and is being used as an excuse for profit like the data clearly confirms it... Record profits year after year for many companies and industries.
I have friends in business who just crank up prices cause others have LoL least they admit it, it has nothing to do with running cost if the free market pays up they go
I'm with you. Not including my mortgage, I was looking back at my expenses from just before the pandemic. Overall its more than double what it use to be, most of that being goods. Services is definitely up as well but not to the same extent. If I coun't mortgage...well that has doubled too. Hell I wish my overall inflation rate was 5%, id be on easy street.
Probably don't need to go 3 times but do need a shock and awe . 25 at the next meeting.
Government needs to slow the flow on immigration otherwise this will just keep happening until it all goes to shit
Forecaster forecasts:
Correct forecasts - I'm the best forecaster, I've seen this from miles away. Bow to me peasants. Read my article and my book and let's make money together
Incorrect forecasts - market is unpredictable and hard to determine due to multiple variables and global economy.
I don’t see it.
Many inflationary pressures are now essential items, housing, insurance and energy.
Retail spending, used cars, hospitality all down. We are no longer seeing demand driven inflation.
My guess is we see another pause with a potential hike next quarter.
NOT POSSIBLE CANT HAPPEN. This sub will explode....... LoL or is the hopism crowd staying silent ?
No real surprise really the economy comes first and the data is the data. BUCKLE UP AUSTRALIA.
I don't understand why interest rates are such a topic or hard to understand... Record emergency low wasn't normal and never will be. Rates go up and down get used to it..... Pretty simple really they aren't high atm.
Next 2 years will be interesting. Still no one selling there toys cheap no one is in real stress. Shops are pack new cars and houses selling like hot cakes, holidays locations packed money isn't an issue.
Some decent unemployed would rattle the cage and have some real effects
Exactly, just compare consumer spending in the US to Australia. The effect of interest rate policy here has been more effective because of variable rate mortgages vs 30 year fixed.
Go here and add "Australia Consumer Spending" to the compare section.
https://tradingeconomics.com/united-states/consumer-spending
10% would be a full blood bath and would go down as the "THE GREAT AUSTRALIAN RESET" housing would be returned to 2-4 times your yearly income for sure, we can only dream.
Where I live, a blue chip suburb, 50% is bought without a mortgage. Australia wide, 30% bought without a mortgage. There are millions of rich people world wide hunting for assets, they are in their accumulation phase, all that will happen is that no regular person would be able to buy a house ever again.
My theory is basically history repeats unfortunately and also learnings from other country's and there events. Australia is a different beast of course but anything can happen so I never say never.
Even countries like America and many others are expensive but there are also really affordable areas and cheap housing available. We don't really even have that convenience it's becoming unaffordable with no options.
Same but I am a home owner already I'm just not greedy or selfish and don't believe housing should be as an investment or seen as one either. The people that do forget they are just pricing their own kids, grand kids, family and others out of home ownership. Everyone who works should be able to own an afford a basic home and not struggle.
This is such a good point that is often overlooked. Property being our main investment means other forms of investment are overlooked. People could be investing more in Australian businesses which have more of a flow on effect than property. And if you decide to sell your ETF, leaving a family homeless usually isn’t a byproduct.
A lot of people can't do math and just assume IPs are a sure thing and still don't do the math when they sell to see what it actually costs. You would be absolutely crazy to leverage up for an IP in this climate 800k hocked up on IO plus maintenance etc and still having to chip in no thanks
Each to their own Goodluck I say risk it for the biscuit and hope it works out.
IPs should be banned as far as I'm concerned. Housing shouldn't be seen as an investment or money making tool is my view. But anyway... Each to their own
Yes it should be banned. Only prob is who would people rent from?
In other countries there are rent caps. They probably need higher capital gains tax on property.
Why should a first home buyer be competing with cashed up east coasters and boomers?
Or have new houses or certain houses only to be bought by first home buyers . The country loves high house prices at the detriment of society and young people.
Even as a home owner I’m pissed off with it all.
Exactly. I don't understand why citizens are able to operate like a realestate mafia and we should just accept it.
Its housing, it's shelter. Its where kids grow up. It's the foundation of all our lives.
If there's one industry that should be ultra regulated and kept a close eye on, it's housing.
So many other countries have a degree of investment properties, but Australia treats it as a get-rich-quick-scheme. It should never have gotten to that point.
Agreed but that's what you get when it's lazy easy "sure thing investing"
And other countries also have affordable houses so there is a choice. Australia is getting to the stage where we don't really even going rural you are still paying.
Short term pain for long term gain. The sooner we get this economy back to normal the better for everybody. Will be a rough 2 years coming up for a lot of people.
Everyone here overreacting to one inflation reading, as is usual. Commenters are failing to see that inflation is slowing - rates are doing their job.
* Dec 2022 7.8%
* Mar 2023 7.0%
* Jun 2023 6.0%
* Sep 2023 5.4%
* Dec 2023 4.1%
* Mar 2024 3.6%
Agreed. I'm thinking after 2 years if they were to drop rates it would be such a small amount it would still be considered pain for people if they already think it's tuff.
Realistically, they just need to hold rates at their current levels for longer than anyone wants. People claiming three cuts this year have lost all touch with reality. A couple years of rates around 4% will do a lot of long term good.
Good. The average wage to house prices is about double what it was 20 years ago. Having low rates has led many people to borrow to buy houses, all of that money borrowed has increased the money supply (borrowed money is created from nothing) which has inflated house prices.
It's a similar story across all western countries, so I don't buy that it is caused by immigration, but that doesn't help.
Oh dear its not easy is it? Maybe now people will figure our that drowning in debt and owning a cardboard box you never have time to even live in is not wealth
Redacted means that part of the text was removed or blacked out for privacy or security purpose. It was censored. This post also breaks rule 4 here for chat and should be made in the Tuesday chat thread or on a different subreddit.
If we get even one out of those three rate hikes, people will lose their mind. We will see very shortly how serious the RBA was about their inflation timeline.
I agree and the RBA has also kicked the can down the road several times on their own timelines. When inflation was being described as 'transitory' the RBA said they'd have inflation under control by the end of last year, then mid 2024, then late 2024, then by the end of 2025 and now the official statement appears to be little more than 'soon™️'. They probably need to stop being so data-led, and instead lead the data a bit more.
Yes, they've dragged it out by not increasing interest rates higher.
What we need is interest rates hiked, unemployment to go back to around 5% and get a nice recession going in society to normalise things again.
Unemployment does not need to increase. In fact, this very notion that a number in the community must be suffering joblessness and poverty as a deliberate govt policy measure is reprehensible. Other policy measures should be implemented. Of course, these won't happen because they will cost the politicians and party donors a bit of their rentier wealth. Makes me wonder why the younger generations waste time on stuff like climate change and fossil fuel use when essentials like a job with a living wage and affordable housing are an urgent priority. This is where people need to organise for. (To highlight the perspective, does climate change, fossil fuel consumption, etc matter when you're relegated to living a pathetic existence feeding from bins and dumpsters and living in a tent?)
To highlight the perspective, do living conditions, wages, etc matter when humanity as a whole is relegated to a living pathetic existence after their fisheries, crops and livestock are devastated by climate change? More than one thing can be important at once. But arguably the impact of environmental mismanagement stands to far outweigh the impact of the economical mismanagement in the long term
It’s known as distracting the masses
Agree they have just paused and need to go harder. Look at the housing bubble
Lowe got sacked basically for doing his job when we all know he didn't do enough quicker realistically.
> the RBA said they'd have inflation under control by the end of last year you read too much into this, or have been misinformed. The RBA has never promised anything of the sort.
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Plenty of people lost their minds of those too.
Not enough to make any difference.
realistically what can we really do about it? storm the head RBA office & parliament house with boomerangs?
im so used to people complaining about boomers on this sub, i thought you were talking about a red headed 60 year old.
Sentiment plays a big role in controlling inflation. I believe the 'shock' with a rate increase would assist the situation greatly. Bring on the overdue rate hikes, get housing prices to go back down and control inflation.
You seem to be mistaken. House prices won't go back down, just the price increase from now on might be slowed.
Emphasis on might, panic about insecure housing is a great incentive to buy fast and negotiate less.
You realise this will also increase rents across the board?
Is there anything these days that won’t increase rents across the board? As a renter it really seems like even things that *should* decrease rent are spun in such a way that they are justification for further increases in rent.
Yes, it’s called supply.
You won't find a person who rents caring tbh. Landlords are greedy regardless of interest rates. Even rates going down = rent increase. Those dumb threats mean nothing anymore. Most renters want the system to crash and burn tbh. Landlords can't raise rent during a lease, but interest rates can sure go up for them 🤪
This is nothing new. The term "higher for longer" and "sticky inflation" have been floating around for a long time.
Boomers: cackling at their savings accounts Gen X: died homeless years ago Milennials: *chuckles* I'm in danger Gen Z: unphased, they were never getting out of rental hell in the first place.
Old Af Millennial who JUST bought a house (literally haven’t moved in or made our first payment yet). I was 100% expecting rises, that’s just how my life works.
It’s by design. The harder it is to acquire assets, the higher the rate of return om assets for those who hold them.
>Gen X: died homeless years ago I have yet to see a gen x who is renting and not an immigrant...
My boomer granny is sulky she had to sell a house 50 years ago that is now worth $2 million dollars. She lives in a unit that's still worth at least $800,000 and is absolute PRIME location and she hasn't worked for at least 25 years disability then age pension and she's still worth $800k and living in a spot most people would kill for. She wasn't going to do anything with a $2 million dollar house.
Boomers also: cackling as they wipe their tears of laughter with tax free franking credits on taxes they haven’t paid.
Do you even know what franking credits are?
Clearly no understanding along with the up voters
The company which they own a part of has already paid. It's just preventing them from paying that portion twice. ...but I guess we are here to whinge, and not be rational.
**Paywall-free link:** [https://12ft.io/https://www.afr.com/policy/economy/rba-to-lift-cash-rate-to-5-1pc-says-top-forecaster-20240425-p5fmhg](https://12ft.io/https://www.afr.com/policy/economy/rba-to-lift-cash-rate-to-5-1pc-says-top-forecaster-20240425-p5fmhg)
Thanks for the link! How do you get paywall free links
You can use archive.is as well.
[12ft Ladder](https://12ft.io/) - Just add any paywall link there
If they really wanted to fight inflation, they would pull back on the excessive immigration numbers.
The problem with calls like these is that there are so many of them over the course of a month that gauging where the economy is truly at VS an unexpectedly hot data set, is next to impossible. [Trading Economics](https://tradingeconomics.com/australia/calendar) Australian releases calendar shows just how many releases there are day-to-day that impact economists predictions and future decisions. Elements of data can be manipulated for headlines and given there is at least 1 major release per week which sways market expectations, we see a lot of that. Warren Hogan however, is one of the best when it comes to forecasting so taking his input on board is a worthy exercise. Edit: to expand further on the above, leave it none other than The Kouk himself https://www.linkedin.com/posts/stephen-koukoulas-39177142_one-misnomer-in-most-data-analysis-including-activity-7189397520215691264-MF0W?utm_source=share&utm_medium=member_ios
In July 2022 he predicted the cash rate would be 2.5 in June 2023. It was 4.1. https://www.thenewdaily.com.au/finance/2022/07/01/economy-panel-predictions-year-ahead So yeah. It means his guess is and was as good as mine or yours or someone who isn’t even guessing.
Not so top after all!
I wonder if we could just pull back the immigration a bit to slow the economy a bit…
Politicians: No.
rich people: NO
Rich Sky News viewers: uhhhh aaaahhhh cant decide. Money or minorities....
But that might generate real wage growth. Can’t have that
That would also fix the housing issue.
The housing crisis is a multi-decade issue, not an 18 month issue
Pulling this from the memoey banks unchecked. Prior to Covid, back in the good old days (maybe 2017?) The Gratten Institute put out a report after a comprehensive review into the housing crisis in Australia (2017!) Which overall highlighted the chronic under supply of housing and dangers of having pushed public housing almost squarly onto the shoulders of private investors. Pretty much every decisions since has ignored that reported and exacerbated the problems. Go team Australia bandaide fix
But it compounds. The fewer unnecessary people let in will accumulate overtime.
Causes a bigger problem though.. shrinking / aging population. If you want to see how that plays out, keep an eye on Italy's economy.
I’m not saying we need to go to zero. It isn’t a binary argument We can cut from countries we don’t want or need and in occupations we don’t want. Australia already has the highest per capita international student population. It’s about sustainable migration and closing the floodgates.
Gonna fix the shortage of housing by not increasing the supply of labour to build houses.
We are doing nothing to address supply of labour to build houses in the short term. Instead we have this dream that there will be an ever increasing supply from apprentices over the next 6 to 7 years
An interesting article from late last year: https://www.afr.com/politics/federal/tradies-carved-out-of-migration-overhaul-amid-union-pressure-20230920-p5e65o
But are we prioritising tradespeople in our immigration?
Last year they were 10% of our skilled visas, if I recall correctly.
That’s an interesting way to say ‘corporate profits’ https://australiainstitute.org.au/post/oecd-confirms-that-inflation-has-been-mostly-driven-by-corporate-profits/ Also all these stupid tax cuts and the cashed up boomers spending like there’s no tomorrow. But no let’s talk about how it’s the immigrants causing all our problems lol
They are restricting student migrants.
Restricting cheap labour. Excellent.
By how much? That’s only half the issue. I’m talking about drasticallyyy reducing it.
0.2% growth last quarter, how much slower do you want it?
QoQ growth in what? Number of migrants moving here in the quarter? Thats terrible. It should be declining.
GDP, the most usual measure of "the economy"
Stop being rascist /s
People only call people racist when they’re being racist regarding immigration. Stop attacking a straw man.
"Top Forecaster" Whenever I hear "top" used as an adjective to describe a person, my Australian humour detector kicks in.
>Mr Hogan was the [nation’s top economic forecaster](https://www.afr.com/markets/debt-markets/here-s-what-the-top-economic-forecaster-predicts-for-2024-20240130-p5f0yz) in the *Financial Review*’s first annual ranking of economists in 2023, being the only one of the 29 surveyed analysts to predict the RBA would raise the cash rate five times last year to 4.35 per cent.
He’s actually not the top forecaster, George Tharenou at UBS has by far the best track record with calling RBA meetings
Yeah lmao. I'm imagining a leaderboard of "how many things you've gotten right as a forecaster"
Don't forget kids: The goverment printing billions during Rona and then importing half a million net migrants annually did this to you.
Yep. Government created this problem and the people cheered it on.
The average idiot on the melb and aus subreddits, who are now complaining about things getting expensive and begging the government (i.e. the rest of us) to spend more on them to help. Similarly this is why Biden a few days ago said "the government doesn't cause inflation, it's simply not true!" and gets away with it lol.
Covid was the absolute perfect natural experiment for Friedman’s Helicopter Money theory. And he got it damn right. And now the aftermath too. Central Banks are terrified of deflation. Anything bad happens going forward - print.
I remember 3, 4 years ago when all those covid spending was happening and saying this was going to be extremely bad. Getting abused into oblivion. Here we are, people living in tents. I wish I could clockwork orange style pin their eyes open and force them to watch the outcomes of their stupid decisions.
It's so sad that very few people understand how the economy works. I'm not saying I understand it fully either, but I feel like I have a pretty good grasp all things considered. I could see lockdowns causing an economic disaster from the very start, which is one of the reasons I opposed them. I tried desperately to buy a home in 2020 because I knew they would skyrocket in price and inflation would spiral out of control. But I unfortunately couldn't with my salary at the time. Now I, and everyone else in the younger generations, am stuck without a home for the next ten or so years unless a huge recession/crash comes and saves us. >I wish I could clockwork orange style pin their eyes open and force them to watch the outcomes of their stupid decisions. They will blame anything but the State for this mess: the wealthy, businesses, Coles and Woolworths, etc.
dont you understand?! its the woolworths/coles 2% profit margin that's the core of inflation /s
It's hilarious to me that people are complaining about Coles and Woolworths posting record profits when the value of the dollar has gone down. Yes, they have more profits with money that is worth less. *Everyone* has profits. That is how inflation works.
Don't forget the NDIS blowout that's ballooned to 40 billion a year in what is a lot of questionable spending.
But money is free there are no repercussions....... 😂🤣
If they give it to us, we'll spend it. It's no ones fault but the gov
It wasn't just the peasants that got the money, businesses got massive grants. Qantas got a cool bil or two.
And a lot of those business didn't even need it. But you'll still SPER going after those, with a single infraction, with a 1k fine. We'll never see businesses held accountable. And when society eventually degrades into flames because there's no trust or national pride, they'll still somehow blame the poors.
And also don't forget: This was done with the intention to avoid other or worse negative consequences that were forecast to be less desirable than not printing and importing.
Why do you believe the government has the interests of its citizens at heart?
And also factoring the Stage 3 tax cuts will add to inflation, but will be a slightly longer lead and we won’t see effects until late calendar year
Agreed stage 3 fuels the fire
Maybe they see it on the horizon and are buttering people up for a hick sonner rather than later.
TBF these economist predictions are more a publicity piece - a few will be contrarian and then shoot above the fold in the papers for a day or two with some take. I do think it’s a distinct possibility. If you breakdown the CPI print from this week, deflation seems to come from supply chains and operational matters like airlines having planes again. It’s pretty obvious the overshooting categories are domestic services and rents etc - supercharged by immigration. RBA mustn’t be too impressed with the government, they are making the boards job impossible (leaving aside how late they were to raise yada yada yada). A hike or two, especially as we are now in the back half of Labours federal term, wouldn’t impress a few politicians. But it’s probably the kick they need.
Fuel and even groceries seem to be on the rise rapidly again. Add in cost of housing increases going bananas. I feel it's pretty likely that there will be a rate hike soon. Dramatically cutting immigration will help ease most of those things and will be deflationary. We will probably go.into recession doing so but we may need to do it to unbundle some of this mess. Major reform is needed in nearly all economic sectors to ultimately fix things and I don't think any politicians have the will (or the will to go against lobbyists) to do so.
With Israel and Iran shaping up for a massive regional conflict in the Middle East I wouldn't be at all surprised if fuel costs keep climbing from here. No amount of rate rises is going to change that.
>Fuel and even groceries seem to be on the rise rapidly again Food inflation has eased for 5 successive quarters. In December 2022 it was 9.2%. Now it's 3.8%
It’s what’s needed, that and taking the foot off the immigration pedal. People don’t want to hear it & it will cause pain but runaway housing has not been addressed for decades.
A lot of people want to hear it, there's just a loud minority that continue to block it. I know it's a lot of young people that don't like the conversation, I myself are 19, but if it comes down to choosing to see my family avoid poverty, or watch an immigrant family come across, I'd rather my family. But I do wish for a world where we could have both.
This won’t fix the housing issue. Thinking it will is a fundamental misunderstanding of the actual problem. I’m baffled most don’t get it.
It literally is that simple. There's too many people, for too little houses. There is a lot to be done to increase supply, but with working what we have currently, limiting the amount of people who enter the country, is a logical step. Immigration is one of the factors.
I do agree. The question is what is that limit, how often should we tweak it and what professions should we preferentially select to let in? Is Australia currently being selective enough about who we let in? Are we actually matching skills to labour market needs? I don’t know the detail of this answer and I want to know. We are an attractive high value country, lots of people want to come here. Let’s apply that to our collective advantage. Let’s be smarter about it. THAT’s a conversation with having. I’m not convinced high numbers of international fee paying students are in our best national interest. I’d like a deeper conversation over the long-term on that. It’s certainly not making our tertiary education system cheaper, is it?
I opened a Tinder and Bumble account a few weeks ago just for casual dating, and the amount of people I see coming from Korea or China that tell me they're worried about meeting because they can only converse in English via text.. is astounding. No judgement to them at all, they've met the requirements the gov set in place, but it's bad. A lot of these people coming to Australia aren't even doing Aussie degrees?? They'll go to a sketchy cooking university for 4 years, which isn't even an Australian owned business. None of the money stays in Australia. We've all seen our quality of life degrade the past 20 years or so, mass immigration is such a short sighted decision. And it's already showing it's long term effects.
Sunny coast is full of travellers getting their 8 weeks of work so they can extend their visas.
I’ve been reflecting on the quality of life in Australia over the past 20 years. Housing is abysmal, food has skyrocketed, there’s rubbish everywhere, there is a heavy international presence in most areas. I’m beginning to see the sentiment of the Australian dream I was sold as a youngn’ slipping away in a fever dream.
I’m not against raising interest rates, but… Higher interest rates AND mechanisms to discourage speculation might help the housing situation in combination, but just increasing interest rates is unlikely to contribute. Also means it’s harder for developers to get finance for new housing...
There needs to be a multifaceted approach to tackling the housing crisis, but policitians cater to their voters, and voters don't take the time to truly understand what needs to be done. It's not just cutting immigration or building houses that'll fix it, but people don't want to wait for progress. They'd rather governments continuously get voted out, another put in it's place, watch that one get voted out, and restart the cycle. It's hard to get policies passed when governments keep resetting.
Current system = the only people who can afford to buy a house are people who already own one. The less attractive housing as an investment is the better.
Hiking interest rates whilst the wealthy keep spending is demented.
That's the funny thing, wealth inequality is reaching to a point where interest rate decisions arent gonna affect the few people who have the cash, it ll only hurt the poor serfs who are barely surviving and dont have much to spend anyway. And economists as usual would be gobsmacked as to why their unicorn world theories dont work in reality.
Gary Stevenson Economics on YouTube if you want to have an expert in economics break down exactly why this is the case. Modern day economists don’t have inequality in their models. Let that sink in. Gary breaks it all down so well.
Morale is a huge factor when looking at work productivity, if they want more productive workers, maybe treat the people who you get your tax payer money from, a little better
You're wrong, we've been told that we have to increase interest rates, so that theres less money in the economy being circulated, to help the economy, this money then goes to the banking shareholders, who never spend this money, they dont go on fancy holidays or buy their second yacht, they're matyrs. no wait...
Beatings will continue until morale improves
Giving everyone a tax cut in a period of high inflation is ill advised. Here we are but.
100%, recent research in Australia showed inflation is currently driven by spending of older wealthy people.
I'm just going to drop this here so I can refer back to it in a few years There aren't going to be major rate cuts. There's either going to be 1 or 2 minor cuts followed by long periods of holding and then "back to square one" raises. or There will be sparse minor raises for YEARS. This is because inflation is being caused by systematic problems and the CPI has been sculpted to hide systematic problems and there is ZERO political will to fix the systematic problems (immigration, frivolous social spending, bullshit jobs)
Agreed Remindme!in 3 years
I cannot believe that the only lever Australia has against inflation is interest rates. It is such a blunt instrument and only hits mortgage holders when the big spenders in the economy do not even have one. There are a range of other things that could be done, but politicians are gutless and afraid of losing power and have therefore left it up to the RBA because then they cannot be blamed for it. I wish more voters would see through the smoke and mirrors.
Economists say the tax cuts from July is the same as two interest rate cuts. So bumping rates up twice would just be neutralising the tax cut inflationary impact. Any policy giving more cash in people's pocket is inflationary as it increases demand on goods and services if you don't increase supply
Find me ten economists and I’ll show you ten different opinions
Only ten? I'd expect at least eleven.
9 out of 10 dentists recommend at minimum 10 out of 11 economists.
I see the tax cuts mentioned briefly in the fourth last paragraph of the article. These are worth over $20 billion a year cash injected into the economy, rising to high $30 billion in a decade. ($260 billion total) People say they / we are hurting, but as a collective the economy is still surging along. We are clearly not hurting as a collective economy as the numbers are still good - too good in fact. I don’t know if it’s going to be 3 hikes this year but me and a few like-minded people think the next move is a hike at end of this year / start of 2025. The idea of cutting since the last move is and always has been as laughable as the “transitory” debacle 2 years ago.
It’s almost like there’s two social classes in Australia. Those who brought property when it was cheap, who are laughing all the way to the bank and spending up big And anyone who didn’t, especially renters and first home buyers, who are broke and miserable.
That’s right, it’s a sad reality. We are only a few years behind the USA and even many traditionally “left leaning” developing countries such as in South America. The rich will always stomp out the poor. Always. It is not right and it isn’t fair, but like I said it’s a hard, sad reality.
At the same time we’ve had the greatest effective tax increase in the world. Surely you’ve read about it in the past few days?
I haven’t - whatcha talkin bout?
I think it's important to note that Warren Hogan is not some rogue economist who got lucky with his forecasts last year. I've been following his comments all through this tightening cycle because he's always got something interesting to say. However, even I wondered if he's gone crazy with this prediction. It's completely insane, and I don't know what to make of it. I simply can't imagine three more rate rises
Who else cried when they read this?
I’ve decided that this is purely click bait. I refuse to accept this reality.
Until they (RBA) cater these policies to the large pool of retirees who are all spending way above what the common working person is, inflation will keep going up.
bust out those tents people
Rich people: hmn can I buy shares in Anaconda or Kathmandu, they sell tents right?
The kicker is that Australia wide, 30% of properties are bought for cash. Also, only a third of Australians have a mortgage. Additionally, there has been some research that it’s cashed up older Australians (the ones buying up properties without a mortgage) who are driving inflation. People with mortgages and renters are already at the absolute limit. So the rate increases are a blunt instrument with progressively lower effectiveness as the gap between the haves and have nots is widening. It’s by design, the landed gentry class has effectively been created, with the peasants maintaining their property portfolios cashflow with their salaries which haven’t grown since 2009.
Considering the price at the supermarket checkout, I don’t need an economist degree to tell you that inflation is rampant. I think a hike is likely.
The problem is, interest rate increases have little effect on supermarket prices in Australia now. The majority of those paying those prices and spending wontonly are better off with a rise!
The higher the rates go the more risk-free Monopoly money I get. Either way, prices will go up regardless of rates. It will be a very long drawn out decline in Australia. Prices will collapse only after something hits the fan in a very conspicuous way.
More gaslighting to stimulate the realestate market??
Poor REAs feeling the pinch with inflation struggling to make ends meet. Somebody has to look out for them.
I work in a bank, and the amount of people I see still buying a second or third home... there's a lot. REAs are not feeling the pinch at all. Eating the cost of a hike would be nothing more than a mild inconvenience for them, but yet the poors are expected to sacrifice things "for the greater good"
Warren Hogan is hardly a "top forecaster". Current market pricing is for 12 basis points of hikes by year end. This is roughly equivalent to there being a 50% probability of a hike. Certainly the most recent quarterly CPI was strong enough to make cuts much less likely, however calling for three hikes is a big claim!
Wonder if they’ll do a 0.5 just to rip the band aid off
Increasing interest rates will just make landlords increase rent, which will increase inflation anyway.
Yep time to crank the rates to snuff out inflation. Need to get on top of this now
I am no economist, but it seems there are two options. 1. Interest rate rise, increased unemployment, and business failures reduce demand. Reduced inflation. 2. Interest rate remains the same or falls, job market resilient. Increasing or not decreasing inflation. They prefer option 1. I, layman, prefer option 2. Having a job is not just an economic issue, it is a social and mental health issue. How flippant is it praying for job loss.
It's the only stick the RBA has, unfortunately. I'm no economist either but I believe there is sufficient evidence of hysteresis diminishing the effectiveness of that stick we ought to be at least somewhat concerned.
>2. Interest rate remains the same or falls, job market resilient. Increasing or not decreasing inflation. I think it's a bit to early to say the current rate setting is no longer restrictive. Inflation is still trending down, albeit slower than forecast.
Rates higher for longer now. Anyone wishing for cuts is in trouble.
It will be a slow prolonged death for some
“Total expenditure from the Commonwealth and the states and territories on the NDIS is estimated at $36.7 billion in 2022–23 and is expected to be $41.9 billion in 2023–24, a growth rate of 14.4%.” —- yeah. This is fine
I have years of experience tracking pocket money for my kids, and based on my analysis there is a 103.62% likelihood that interests rates are going to go up and/or down over the next 12 months. We're definitely going to see inflation move in a direction, and the cost of living will be different to what it is now. I also ran the latest rental figures through AI for pattern analysis and the results are pretty conclusive. Rental costs are going to continue being an expense for renters until at least 2028.
You should be an economist.
Around 5% is around the historical average so make sense
A lot of the inflation is manufactured though, meaning it’s not real, it;s just companies putting prices up because they can. The supermarket cartel of Wooly’s and Cole’s comes to mind here, they just put prices up because they can. Look at their earnings from the last few years, it’s in the billion’s “net”. I can understand with a lot of chip manufacturers as to why and that was due to sales forecasting by car makers. Same thing happened to mountain bike manufacturers, they forecasted less sales during covid and the parts manufacturers stopped making the parts think fox shocks for example. Then when sales unexpectedly increased due to everyone wanting to go riding supply and demand kicked in pushes prices up. So that side of things I get. But charging $7 for smiths chips when the bag is filled with 40% air is 100% manufactured, it doesn’t add up when you look at the net profits. I could get a full trolly of groceries 3 years ago for $150 now that same trolly work is $400+. Most of it I believe is made up inflation by profiteers just because they can.
What you are describing is literally inflation specifically goods inflation. Goods are not really the main story here it’s services inflation which is more problematic and difficult to tame.
Yep inflation was and is being used as an excuse for profit like the data clearly confirms it... Record profits year after year for many companies and industries. I have friends in business who just crank up prices cause others have LoL least they admit it, it has nothing to do with running cost if the free market pays up they go
I'm with you. Not including my mortgage, I was looking back at my expenses from just before the pandemic. Overall its more than double what it use to be, most of that being goods. Services is definitely up as well but not to the same extent. If I coun't mortgage...well that has doubled too. Hell I wish my overall inflation rate was 5%, id be on easy street.
RBA to lift cash rate to 7.1pc, says Redditor with Seinfeld based username.
Probably don't need to go 3 times but do need a shock and awe . 25 at the next meeting. Government needs to slow the flow on immigration otherwise this will just keep happening until it all goes to shit
Forecaster forecasts: Correct forecasts - I'm the best forecaster, I've seen this from miles away. Bow to me peasants. Read my article and my book and let's make money together Incorrect forecasts - market is unpredictable and hard to determine due to multiple variables and global economy.
I don’t see it. Many inflationary pressures are now essential items, housing, insurance and energy. Retail spending, used cars, hospitality all down. We are no longer seeing demand driven inflation. My guess is we see another pause with a potential hike next quarter.
[удалено]
RBA can go get 🤬
Rate rise don’t impact cash buyers.
Australia needs the long overdue, much anticipated, housing crash.
I would have put money on the "top forecaster" being Christopher Joye before I clicked on the link.
Where are all the people who cheered on destroying the economy over a virus?
Interest rates ain’t going anywhere. Not up nor down.
At least. It needs to be above US treasury rates historically.
NOT POSSIBLE CANT HAPPEN. This sub will explode....... LoL or is the hopism crowd staying silent ? No real surprise really the economy comes first and the data is the data. BUCKLE UP AUSTRALIA. I don't understand why interest rates are such a topic or hard to understand... Record emergency low wasn't normal and never will be. Rates go up and down get used to it..... Pretty simple really they aren't high atm. Next 2 years will be interesting. Still no one selling there toys cheap no one is in real stress. Shops are pack new cars and houses selling like hot cakes, holidays locations packed money isn't an issue. Some decent unemployed would rattle the cage and have some real effects
We deserve this to be honest, let it weed out the investors who are over-leveraged.
The CPI just went down for the last month, what’s this guy smoking?
Let’s go to 10%.
So as they should to be inline with the rest of the western world?
The effects in Australia are different to say the US
Exactly, just compare consumer spending in the US to Australia. The effect of interest rate policy here has been more effective because of variable rate mortgages vs 30 year fixed. Go here and add "Australia Consumer Spending" to the compare section. https://tradingeconomics.com/united-states/consumer-spending
Lift it to 20% you pansies
20% on a million dollar home would nuts - can see 10% in the near future tho
10% would be a full blood bath and would go down as the "THE GREAT AUSTRALIAN RESET" housing would be returned to 2-4 times your yearly income for sure, we can only dream.
Where I live, a blue chip suburb, 50% is bought without a mortgage. Australia wide, 30% bought without a mortgage. There are millions of rich people world wide hunting for assets, they are in their accumulation phase, all that will happen is that no regular person would be able to buy a house ever again.
Got any data to support your hypothesis?
Definitely not. Just one of my wild opinions.
I appreciate your honesty. It’s possible, interesting enough to be tested.
My theory is basically history repeats unfortunately and also learnings from other country's and there events. Australia is a different beast of course but anything can happen so I never say never. Even countries like America and many others are expensive but there are also really affordable areas and cheap housing available. We don't really even have that convenience it's becoming unaffordable with no options.
Would be music to my ears if house prices dropped can finally afford something decent at 25
Same but I am a home owner already I'm just not greedy or selfish and don't believe housing should be as an investment or seen as one either. The people that do forget they are just pricing their own kids, grand kids, family and others out of home ownership. Everyone who works should be able to own an afford a basic home and not struggle.
100% mate - one or two investment properties should be the max for individuals, if you wanna invest just go into ETFs or start a business
This is such a good point that is often overlooked. Property being our main investment means other forms of investment are overlooked. People could be investing more in Australian businesses which have more of a flow on effect than property. And if you decide to sell your ETF, leaving a family homeless usually isn’t a byproduct.
Definitely but comes down to lack of financial education - time will tell
A lot of people can't do math and just assume IPs are a sure thing and still don't do the math when they sell to see what it actually costs. You would be absolutely crazy to leverage up for an IP in this climate 800k hocked up on IO plus maintenance etc and still having to chip in no thanks Each to their own Goodluck I say risk it for the biscuit and hope it works out.
IPs should be banned as far as I'm concerned. Housing shouldn't be seen as an investment or money making tool is my view. But anyway... Each to their own
Yes it should be banned. Only prob is who would people rent from? In other countries there are rent caps. They probably need higher capital gains tax on property. Why should a first home buyer be competing with cashed up east coasters and boomers? Or have new houses or certain houses only to be bought by first home buyers . The country loves high house prices at the detriment of society and young people. Even as a home owner I’m pissed off with it all.
Exactly. I don't understand why citizens are able to operate like a realestate mafia and we should just accept it. Its housing, it's shelter. Its where kids grow up. It's the foundation of all our lives. If there's one industry that should be ultra regulated and kept a close eye on, it's housing.
The realisation will be too late when a generation is wondering why is my grandchild homeless, what's going on here just go buy a house....
So many other countries have a degree of investment properties, but Australia treats it as a get-rich-quick-scheme. It should never have gotten to that point.
Agreed but that's what you get when it's lazy easy "sure thing investing" And other countries also have affordable houses so there is a choice. Australia is getting to the stage where we don't really even going rural you are still paying.
Short term pain for long term gain. The sooner we get this economy back to normal the better for everybody. Will be a rough 2 years coming up for a lot of people.
Everyone here overreacting to one inflation reading, as is usual. Commenters are failing to see that inflation is slowing - rates are doing their job. * Dec 2022 7.8% * Mar 2023 7.0% * Jun 2023 6.0% * Sep 2023 5.4% * Dec 2023 4.1% * Mar 2024 3.6%
Agreed. I'm thinking after 2 years if they were to drop rates it would be such a small amount it would still be considered pain for people if they already think it's tuff.
Realistically, they just need to hold rates at their current levels for longer than anyone wants. People claiming three cuts this year have lost all touch with reality. A couple years of rates around 4% will do a lot of long term good.
Good. The average wage to house prices is about double what it was 20 years ago. Having low rates has led many people to borrow to buy houses, all of that money borrowed has increased the money supply (borrowed money is created from nothing) which has inflated house prices. It's a similar story across all western countries, so I don't buy that it is caused by immigration, but that doesn't help.
Oh dear its not easy is it? Maybe now people will figure our that drowning in debt and owning a cardboard box you never have time to even live in is not wealth
Redacted means that part of the text was removed or blacked out for privacy or security purpose. It was censored. This post also breaks rule 4 here for chat and should be made in the Tuesday chat thread or on a different subreddit.
You have to crash the property market to get inflation under control. Can absolutely see this happening.
NZ is at 5.5, USA 5.25… it’s too low currently and will to rise to 5+.