From a CAAN Contributor
IT’S on the money alright!
As said … bank deposits are up to near the second highest they have ever been, credit card debt hasn’t grown. In fact it has declined!
The backlog of 2020 is catching up … bank lending writing new records with government handouts … record low interest rates … low stock levels as building starts declined in 2020
The demand for detached housing going to record levels as people living in apartments scramble to leave after their pandemic experience in 4 walls … yarda yarda
Yes, and he is right about no wage growth, growing debt that only needs an interest rate rise to see it all come crashing down … CHAOS!
What Michael did not mention:
-interest rates are not expected to increase any time soon, may be in 2022, a big if…
-migration, now that could do even more harm to our housing supply issues, it’s the elephant in the room, but don’t mention it because it will bring down the ‘thought police’ upon all
-doubt, and more doubt has fuelled the shortage of housing stock on the market, home owners haven’t been sure about what is going to happen next so they are sitting on their hands
According to the ABC Business … I think it was … there was a comparison Pre Covid to Post Covid i.e., February 2020 to February 2021 which showed 93% of jobs had been recovered in Australia … the best outcome in modern economies like the UK, US and parts of the EU which have only achieved 65 – 85% recovery of jobs … Well Done Australia!
What Michael also said:
-those that are selling are asking for more because people are paying, they are buying what is available, the FOMO has taken hold!
.banks are awash with money, they are paying nothing for it so why wouldn’t you go into real estate?
BUT
-What about the other unmentionables like
.the dirty money coming out and being spent on real estate
.the company execs exercising their will following achieving record profits in 2019-2020 having been given massive subsidies courtesy of their Liberal Government mates, are happy to spend up big in real estate
LET’S NOT FORGET …
-all the firms and businesses that did close their doors owing to the pandemic …
.real estate agencies, cafes, restaurants, tourist base businesses, airline employees, travel agents, to name some
.the banks were still recovering from the Royal Commission damage when the pandemic hit and so as soon as they could, once they received the nod and wink from those in government, started to work on rebuilding their reputations, and no better way to do this BUT to start lending, big time, hence starting in December 2020 through January 2021 they got into a race to lend the most
.it’s a win/win, banks are happy, the government’s happy because they were backing a building led recovery, and the banks have gone ahead and done the hard yards for them
ALL THE WHILE …
-the Government can say, ‘look what is happening, things are on the move again’ the inference being ‘look at what we have done.’
The real question is ‘did this lending spree come about through some understanding between the government and the banks not to proceed with reform of the sector?’
THEN …
.those who have done badly as office rentals have shrunk and will continue to do so as leases are not renewed, and tasks are sent home to where the employees live, putting even more pressure on wages to flatten further
NOTICED BIG TIME …
It must have hit the Libs like a bombshell when FAIRWORK Australia continued to pursue ‘wage theft’ (previously known as mistakes, oversites, errors etc etc) even during the pandemic …
Meanwhile the shopping centres are steadily showing signs of strain, the number of empty shops has not declined
Personally, I don’t think there’s going to be a crash anytime soon, there may be some increase in the number of properties for sale as things tighten up a bit, an increase in mortgage defaults etc, with Job Keeper and Job Seeker being pared back … there’s likely to be some ripples, but even the left concedes it is going to affect certain sectors a hell of a lot more than others, and targetted assistance to certain areas is on the cards …
At ground level it will remain much the same but …
–workforce mobility has taken a back step, affecting supply of places for sale
-workforce participation, working from home has boomed, hence less houses for sale and those working from home are now looking for better digs than the 4 walls of a small apartment
ALL IN ALL
Not a pretty picture but that’s the market place
RELATED ARTICLE: ‘Michael Pascoe: Easy Money driving Housing Boom … ‘ or …
‘Getting FOMO while others borrow easily? Buyer, be aware in the boom’
COMMUNITY ACTION ALLIANCE FOR NSW (CAAN): HOUSING INEQUALITY WITH AUSSIES LOCKED OUT! 