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Thread: PSB Economic Confidence Thread

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    Member Gippo's Avatar
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    PSB Economic Confidence Thread

    Dust of your Chrystal Balls and lets glance into the future.

    What does the collective PSB brain trust predict will happen to the Austraylian economy in the coming year or 3.

    Linky to kick you off:

    http://www.dailyreckoning.com.au/hou...cw/2015/10/13/

    Discuss. Try to leave out complex economic jargon so everyone can have a read and contribute.

    My thoughts in a nutshell:

    • Govt thought money grew in ground. Spends up.
    • Mining dies. Gravy train derailed.
    • Interest rates historically low.
    • Surban infill designed to boost construction = jobs.
    • Housing construction replaces Mining
    • Over supply of homes.
    • Over priced homes.
    • Every man and other dumb cunt owns 4 properties.
    • Easing rents - oversupply.
    • Property prices still going up elsewhere.
    • See where this is going yet?
    Its all good on Ducati's
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    Member INTJ's Avatar
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    Rents already easing considerably. Oversupply of empty properties in many suburbs... just head out to home-opens on any given day. They're mostly empty and have been for considerable time.

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    Member datsikk's Avatar
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    House Prices can't keep going up as people can't afford them. In Perth, I think the bubble is about to pop. Auction clearance rates are something like 40% whereas in the other majors its like 70%. There have already been many multi story projects put on hold due to low demand. More people are leaving WA (good bye kiwis!) then entering. As the article states, its a downward spiral as less demand will increase unemployment not only in directly affected industries such as building homes but right down the supply chain..ie bunnings, parcel delivery, supply chain jobs..

    wages won't be increasing but interest rates can only go so low...if they increase alot of people are in the ..... Add to this that many people bought homes on interest only loans and picture ain't looking good.

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    Member GSXRossi's Avatar
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    Quote Originally Posted by Gippo View Post
    Dust of your Chrystal Balls and lets glance into the future

    Surban infill designed to boost construction = jobs[/LIST]
    Actually pretty sure WA is forecast to loose 20k worth of construction jobs this year. From a mate in the industry

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    Member stromrider's Avatar
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    Quote Originally Posted by GSXRossi View Post
    Actually pretty sure WA is forecast to loose 20k worth of construction jobs this year. From a mate in the industry
    20k worth doesn't sound like a lot of money...

    Quote Originally Posted by datsikk View Post

    wages won't be increasing but interest rates can only go so low...if they increase alot of people are in the ..... Add to this that many people bought homes on interest only loans and picture ain't looking good.
    This will come back to bite a lot of people in the arse


    From my point of view, a lot of people are dropping their private health care cover. This doesn't happen because people no longer get sick, it happens because it is not an essential in this country where the public system provides a reasonable level of care. It is one of the last things people drop though, so when they do, it's because the economy is getting quite bad.

    This will turn around because eventually people will realise that they can't be dependent on others for a job and so they need to create their own company/enterprise and work for competitive rates. This will lead to smaller businesses and (hopefully) a bit more of a good old fashioned service. We will still need big companies, but they will hire fewer people. There will be less of a middle class and a bigger gap between upper and lower class.

    Perth really isn't too bad yet because a lot of people still have a lot of excess money to waste on entering ironmans and triathlons.
    Last edited by stromrider; 07-03-2016 at 03:20 PM.
    If you keep trying to explain it with logic and facts you will possibly end up hurting your sanity.

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    Member GSXRossi's Avatar
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    Quote Originally Posted by stromrider View Post
    20k worth doesn't sound like a lot of money...
    20,000.... People

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    Member stromrider's Avatar
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    Quote Originally Posted by GSXRossi View Post
    20,000.... People
    Thought you were talking about money and had missed a few zeroes.

    Economies are usually measured in dollars because dollars matter and people don't, correct?

    E.g. if 20000 people lose their jobs, but the economy grows because Gina digs up more ore, then that's technically growth. Which is good.
    If you keep trying to explain it with logic and facts you will possibly end up hurting your sanity.

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    Member =Stevo='s Avatar
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    Anyone who has been paying attention will have noticed Perth housing has already taken a massive nose dive, with sale times increasing, values dropping and rents decreasing.
    The so-called 'bubble' isn't about to pop, but the market has certainly been deflating for quite a while now.

    Downward pressure on wages and big slowdown/reversal , downwards pressure on local pricing for everything from cafes to new apartments (the latter of which we are shortly going to have a fair oversupply of, with plenty of new owners settling on apartments that will be worth 10-15% less than what they paid) judging by the massive number of developments going on around the Perth metro area right now.

    Tough times for property prices for the next 12 months, but a great time to buy if you negotiate hard, then a couple of years of stagnation before things get moving again with more metro subdivisions - you'll find the median house price will probably stay the same (and so things will appear flat) but the return per m2 of land will continue to increase.

    Contrary to popular belief, there is a lot more to Australia than just mining and property, and in another decade or so this will just be another small dip or side note in the long term upwards trend of growth...
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    Member Sprint's Avatar
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    Quote Originally Posted by Gippo View Post
    Try to leave out complex economic jargon



    S.
    Chuck Norris is 1/8th Cherokee. This has nothing to do with ancestry, the man ate a fucking Indian.
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    Member dwillia's Avatar
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    I did this two and a half years ago and dumped my properties while the going was good - been renting and saving cash since

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    Member -JC-'s Avatar
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    It's pretty clear that we are on a downward trend, and I think the trend has a few years yet to run.
    We've seen some major projects put on the backburner and still see an amount of oversupply, both in industry and housing.
    I'm thinking that we'll see an turn around and upward trend again, but that is likely to be a good 5 years away before we really see things picking up again. It takes a period of sustained growth to build confidence and lead times for major projects and investment.
    I'm not seeing doom and gloom, still better than a lot of economies elsewhere in the world. . . and maybe I'm just an old bugger, but been through this cycle a few times.

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    Member INTJ's Avatar
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    If you go far up north (maybe down south is the same...) to the new land releases around Alkimos/Burns/Jindalee etc. - you'd notice that for the past 2 or so years they release 'stages' which is quite normal, but often the 'stages' have been quite literally 5-10 blocks or less. Talk about falsifying a shortage.

    "ONLY 2 LOTS LEFT" they say... when there was only 5 to begin with 3 months ago...

    Back when we bought the land our house sits on a 'stage' was about 60 blocks or half a fucking suburb...

    'Catalina Estate' in Clarkson is a classic - initially they insisted they will only sell to people who register their details and obeyed all sorts of fucking stupid rules on the sale date to buy a plot. Knob head developers. I guess it worked and buyers felt a sense of exclusivity...

    /rant#1

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    As a first home buyer with my 20% deposit saved, I'm waiting until later this year to buy. It will fall further. I've been watching the past 9 months, and a house I wanted to buy 12 months ago for $392k is not worth that now. It's not worth $350k.
    It's a double edged sword for me. Lower home prices are great, but when that happens my job security diminishes as well.
    I do believe they will be flat for many years, but ultimately rise. They're not making any more land.
    I wouldn't buy an apartment though. I have too much shit. I need a shed. They're also far too oversupplied.
    My gut feeling is that there's a lot of pain coming. Provided I keep my job over that time, bring it. I've got nothing to lose.
    It's a buyer's market.
    Investors? I hope you've diversified.

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    Quote Originally Posted by INTJ View Post
    If you go far up north (maybe down south is the same...) to the new land releases around Alkimos/Burns/Jindalee etc. - you'd notice that for the past 2 or so years they release 'stages' which is quite normal, but often the 'stages' have been quite literally 5-10 blocks or less. Talk about falsifying a shortage.

    "ONLY 2 LOTS LEFT" they say... when there was only 5 to begin with 3 months ago...

    Back when we bought the land our house sits on a 'stage' was about 60 blocks or half a fucking suburb...

    'Catalina Estate' in Clarkson is a classic - initially they insisted they will only sell to people who register their details and obeyed all sorts of fucking stupid rules on the sale date to buy a plot. Knob head developers. I guess it worked and buyers felt a sense of exclusivity...

    /rant#1
    House prices aren't going to artificially inflate themselves you know, takes hard work and determination to create and cultivate a housing bubble.
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    Quote Originally Posted by Gippo View Post
    Austraylian
    Bloody infidel
    Best I can do to describe the issue is this.
    Normally it goes BRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR, shift, BRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR

    But now it's a bit more like this
    BRRRRRRRRRRRRRRRRRRRR-r-r-r-r-r-r-r-r-r-r-r-r-R-R-r-r-r-r-r-, shift

    exan
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    Member stromrider's Avatar
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    Hey Gippo

    Are you wanting this thread to be about confidence in the economy or just about housing? I'm just interested as it seems most people have gone down the housing route early.

    You were/are in a finance related industry.

    Confidence in the economy is pretty much at the hands of the media and/or politicians who minimise/maximise events to their advantage.

    If you keep trying to explain it with logic and facts you will possibly end up hurting your sanity.

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    Member INTJ's Avatar
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    Anything other than property is hard to forecast because the world economies are so complex.

    Is China about to burst?
    What's gonna happen when Trump is President?
    What about India's middle-class?
    Are Syrians about to burn Germany to the ground?
    Will Rottnest Island ever be worth visiting?

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    Member stromrider's Avatar
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    Quote Originally Posted by INTJ View Post
    Anything other than property is hard to forecast because the world economies are so complex.

    Is China about to burst?
    What's gonna happen when Trump is President?
    What about India's middle-class?
    Are Syrians about to burn Germany to the ground?
    Will Rottnest Island ever be worth visiting?
    1. Probably
    2. WWIII
    3. Will want a comfortable lifestyle, requiring demand for resources.
    4. Not all muslims/arabs are terrorists
    5. It's already good if you go by boat as a pint of Narrow Neck at the pub sits well after sailing across. Wouldn't stay on the island itself though.
    If you keep trying to explain it with logic and facts you will possibly end up hurting your sanity.
    Likes INTJ liked this post

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    Member QUACKA's Avatar
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    Quote Originally Posted by INTJ View Post
    Anything other than property is hard to forecast because the world economies are so complex.

    Is China about to burst?
    What's gonna happen when Trump is President?
    What about India's middle-class?
    Are Syrians about to burn Germany to the ground?
    Will Rottnest Island ever be worth visiting?
    -no
    -ain't going to happen
    -if they keep selling Tata's there fucked
    -no but Germans will burn Syrians to the ground
    -another no still cheaper to go on a overseas holiday

  20. #20
    Member fetus's Avatar
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    So many redundancies going around. I know several friends who have been made redundant, while some found new jobs easily others are finding that the market is absolutely swamped with other people looking for work so very competitive.

    I think the rest of australia now needs to prop WA up and we need our fair share of GST back. State government treasury is not currently looking to promising at all.

    House prices are already dropping however I think it's going to be the less desirable suburbs between "inner city" and "outer suburbs" that suffer the most.
    Inner suburbs are highly desirable and people will just not sell if they aren't going to get a price they like. There are very few FIFO redundant workers who may be forced to sell in them.
    Outer suburbs are mostly already very affordable. Any drop in price would quickly be offset by first homebuyers snapping up more affordable houses. If there was a drop there it would be short lived.
    Suburbs like belmont, lathlain, carlisle and whatever their NOR counterparts are (mirabooka, balga etc I assume?) Which had a quick price rise but have shitty houses and way too much homeswest scattered through them causing crime would likely be the first to see that bubble burst in my oppinion.
    Anywhere not average person easy cycling distance from the city or the beach, or easy walking distance from the river or beach, that doesn't already have many houses under 400k would be the first to start seeing many houses drop below that mark.
    Hopefully if that happens it will be short lived as people snap up these more affordable properties and we go back to a steady rise in prices at or above inflation. Many areas haven't been seeing above inflation for a while anyway so they were technically already dropping.

    Luckily (not for me as I wanna buy some shit online, but for the country) our dollar is currently low. As an export based economy there is only so far we can fall as the more our dollar drops the better our economy will do. But I think we are very much headed back to a low dollar and not overly desirable for investment unless the country finds new means to make money that don't involve china buying shit for way more than it's worth.

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