Mar 18, 2019
Many commentators are worried that the current crisis in consumer confidence will impact economic growth.
They suggest that the negative wealth effect of falling house values could lead to a cut in consumer spending and that this plus the collapse in construction activity (one of our biggest employers) at a time of overseas economic headwinds could combine to create the perfect storm which could lead to Australia into recession.
In his first public speech for 2019 Reserve Bank Governor Philip Lowe highlighted the issues that are likely to shape the future.
Lowe also believes the current slump in our property markets is "manageable" but conceded that now it's just as likely that the next move in interest rates is down as it is likely that we'll have a rise in rates.
For what it's worth I think interest rates will be cut twice this year bringing the rate down to one percent.
6 Reasons we’re not going into recession
Here are 6 reasons given by Governor Lowe as to why we’re not going to have a recession:
This should be enough to see further gradual progress in lowering unemployment.
3. We’re creating more jobs.
Last year:
Now I’m not an economist but I see plenty of other positive signs amongst all the pessimism in the media.
These include:
Our Housing markets
And while clearly not all the news is good for our housing markets there are clearly some positives that the media tends to overlook.
The big unknown
Clearly, we have a mixed bag of economic fundamentals that will interplay on our economy and our housing markets.
While these are relatively easy to quantify, the big unknown will be consumer sentiment and currently, that is low and unlikely to change until the outcome of the federal election is known.
Having said that, those investors who take a long-term view and recognise that all economic downturns are temporary, while the increase in the value of well-located residential properties in our capital cities is permanent, will be able to take advantage of the property investment opportunities the current buyer’s market is delivering us.
Links and Resources:
Metropole Property Strategists
National Property and Economic Market Update 1 day Trainings use the coupon code: PODCAST
Some of our favourite quotes from the
show:
”The housing markets don’t work in isolation, similarly, the Australian economy doesn’t work in isolation.” – Michael Yardney
“If you’re in the financial position and it fits in with your long-term strategy, it definitely is worth considering getting into the market now, because underlying demand is going to pick up between now and when the election occurs.” –Michael Yardney
“You need an area that’s going to have current and future levels of multiple growth drivers, and population growth and economic growth.” –Michael Yardney
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