tag:blogger.com,1999:blog-5613349802102193582.post8337088154509775720..comments2023-12-22T23:56:04.826+11:00Comments on Houses and Holes: The death of housingDavid Llewellyn-Smithhttp://www.blogger.com/profile/01762856583909059662noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5613349802102193582.post-48942654713061231232010-11-04T09:24:03.131+11:002010-11-04T09:24:03.131+11:00Interesting. The ABS data showed prices down in fi...Interesting. The ABS data showed prices down in five cities, and up in three, but a slight positive national figure (due mainly to strong Melbourne result). The question is what happens from here. Will Q4 be the first quarter to show a national fall. If so, that just might spook the public and falls could accelerate. But it prices rise in Q4 then the public will think the worst is over and we're back on an uptrend. Public sentiment is everything. To be honest I don't think the political will exists for more housing stimulus. Both parties are too weak, they've got more important things to think about, and frankly I'd wager they're happy with this flat result. A 'soft landing' is exactly what the RBA and government wanted to achieve, and that's what they've got here.<br /><br />Alex Barton<br />Australian Property Forum<br />http://s4.zetaboards.com/Australian_PropertyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5613349802102193582.post-69722734174181279512010-11-03T17:24:58.038+11:002010-11-03T17:24:58.038+11:00Agree with everything you say and yes the RBA is b...Agree with everything you say and yes the RBA is being heavily influenced by business funding arising outside the banking system...David Llewellyn-Smithhttps://www.blogger.com/profile/01762856583909059662noreply@blogger.comtag:blogger.com,1999:blog-5613349802102193582.post-15584829589453995672010-11-03T15:26:06.815+11:002010-11-03T15:26:06.815+11:00What are your thoughts about the impact of the amo...What are your thoughts about the impact of the amount of financial/ non financial equity and bond raisings since the GFC. Even though business lending dropped by 3.2% for the year, it seems to be more than offset by bond/equity issuance since the GFC. Has this influenced the RBA to act? <br /><br />This from RBA Sept Bulletin<br /><br />http://www.rba.gov.au/publications/bulletin/2010/sep/4.html<br /><br />"During the financial crisis, the rate of growth of financial' bonds outstanding increased to around 20 per cent per annum as banks substituted toward more stable, longer term sources of wholesale funding. Investor demand for Australian banks' bonds remained strong, underpinned at the peak of the crisis by the introduction of a guarantee by the Australian Government and strong investor appetite for highly rated debt"<br /><br />"The value of foreign investors' holdings has risen sharply since mid 2007 (by around 65 per cent), such that foreign investors now hold a little over three-quarters of the stock of corporates' bonds outstanding"<br /><br />In the end, the shift of investment funding into productive business debt compared to unproductive housing debt must be a good thing in the long term. But as a consumer society a lot of people will suffer in the short to medium term, especially mortgagees.<br /><br />Lets hope the mining boom can continue. All our eggs are in the China "basket" boom continuing.<br /><br />This quote from Lou Jiwei, chairman of China Investment Corp, head of China’s $300 billion sovereign wealth fund, "there may be a “big drop” in the pace of the nation’s economic growth in the coming three to four years as more of the population retires.<br />We cannot use the past 15 years or 30 years as a simple extrapolation of growth trends to forecast China’s future,”<br /><br />He doesn't seem to have the same unending optimism that the RBA seems to hold.Anonymousnoreply@blogger.com