Death spiral for the housing market
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- Опубліковано 9 вер 2024
- East Coast residential property continues to fall as credit tightens, but in this interview, Charlie Jamieson, CIO at Jamieson Coote Bonds, warns that property investors could be about to make matters worse by becoming forced sellers in a falling market.
Charlie outlines the mechanics of margin calls and forced selling in this short interview, and told us that: “…not a lot of people have that excess liquidity readily available, so they need to sell and they need to sell in a hurry. And if this happens en masse, clearly you can see the death spiral effect occur very quickly”. He also flags a catalyst in February next year that could see credit contract further still.
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In the southern hemisphere housing goes down the toilet _clockwise._
Chinese hot money withdrawn accounted for 30% of the market - apartments and existing high end houses.
The Australian economy has been consumed by housing to the point where 70%+ of all direct and one step away employment is housing related. Where once we had manufacturing and secondary value added markets these are now defunct.
Consider not just construction, tradies, finance, insurance, real estate, interior design, renovations, supply chain including hardware and resources, furnishings (retail), finishings from glass to taps, architects, town planning, councils, road construction (new estates), lawyers, landscaping, marketing, new cars (equity maaate) etc, etc, etc.
A major correction will see unemployment go through the roof and compound the crash.
Next consider the single largest employer in Australia - small business. Over 60% of all small businesses are funded through their home mortgages - these will face either tighter restrictions on lending and or reduced valuations lowering lending.
Finally the impact on state and federal tax receipts and the current driver of the economy - stamp duty and land tax (council rates). $8 Billion has already been wiped off Victoria with only a 6% drop.
That's enough to cancel half the infrastructure projects announced with state only funding - oops.
As Dent said on Martin North yesterday - "No bubble in the last 200 years has dropped by less than 70%" - not the stock market crash, not the dot com, absolutely NEVER.
The big financials and their funds evaporate and the bubble completely collapses.
People have absolutely no idea whats coming - Argentinian level financial extinction event.
Private Debt - $1.8 Trillion - game over.
Spot on points! I laughed at the (second half of the) final sentence: "Argentinian level financial extinction event"
Its hardly Argentina - Australias debt is denominated in AUD, not USD.
@@beaubeau6498 What does that have to do with literally anything. Do you even know about Argentina ? Its debt crisis ? How it was the "miracle of the world" - and Argentina was on the Peso - not the USD.
But if you are going to start talking about printing our way out of it because we control our currency then stop posting now.
@@audas yes it is US denominated debt being held by a New York Hedge fund.
If you dont know why US denominated debt is bad for economies that use valueless currencies then thats your own fault
@@beaubeau6498 Do you know when Argentina's economy imploded ? We are talking 20 years ago.
Further ALL FOREIGN DEBT is denominated in the foreign currency it is borrowed from - and then hedged - including Australia's.
Just sold my house now im renting bring it on 👊👊
Don't have your money in the bank not with the new Bail in laws and the new legislation on cash ban, do you homework on here, check out John Adams and Martin North videos.
Sound commentary. Well done.
All bubbles burst.
Greed greed
Rates should up
What the real number of fall time work?
Not part time work?
bloody good analysis. fire sale in off the plan here we come. . await further directions
Bring it on.
I agree with the sentiment of many comments, but I wonder about 2 things:
1) 30-something's who rent will look to buy if property is cheap (relative to rents), interest rates are low and credit is still available. This is a non-trivial proportion of the market.
2) China could potentially reverse their outflow measures at any point and so long as foreign lending restrictions aren't excessive, we could rebound quickly.
I still think the likelihood of a lost decade is very real, but I don't think Argentina is a valid comparison. Unstable govt, non-English speaking, middling tertiary institutions, whereas Chinese middle class really do view desirable places to live as New York, London, Melbourne, Sydney, roughly in that order. Just a thought. Happy to be (politely) rebuffed on any points, but please do keep it civil.
at what point, properties is considered 'cheap' for young professionals? now seems cheap, but ‘it the near future it may be cheaper’ is the mindset of many
Excellent commentary ...
Its all been planned since the 80,s - you will receive the RFI chip when this finally does down - their one with your number on it already. You wand be able to buy and sell without it.
That was quite impressive.
@MrFourkinghell 😂😂 hahahaha 😂😂 You're a tool. I found this video to be a realistic evaluation of current market conditions. Outlining facts based upon reality rather than speculation.
Let me guess?.. This video wasnt dooms-day enough for you? 😂😂
@MrFourkinghell Obviously you're easily offended. There is some serious value in this short segment. Brief outline of the current Australian economy, and a couple tips for the future if you listened closely.
@MrFourkinghell Could you possibly infer why you're opposing the obvious declines in Australian housing prices and auction clearance rates, increasing household debt, international index drops? What about global economics, FX, emerging markets, China, etc? Aust private debt heading towards almost $2trill?
@@blaqusonic1 Mrshitforbrains is just kicking and screaming like a little girl because he's just purchased an off-the-plan apartment and doesn't like what he's hearing. Cognitive dissonance in a nutshell.
Thank you well said 👍
Only those wage gains... Isn't the lucky country still being lucky ! How wunderbar !!!
If banks don't create money via loans how will the interest payments be payed on existing loans ? , it can't .Australians don't have savings , were all broke and in far too much debt .
If banks loans" that are there book assets loose value , at what percentage of the losses under the fraction reserve system do the banks become insolvent 10% ? 15% ? . Surely a 20% decline in the property market will make the banks insolvent .
Or the banks holding of government bonds Australian Government and US government , at what point will the rising rates on bonds servilely diminish the value of the banks held bonds under the fractional reserve system and send the banks insolvent .
Bank stocks are down so there is no cash injection there who wants to buy that , dividends will be cut so bond holders can be payed .
Banks assets < loans/ mortgages > are loosing value , mortgages are not being taken out so profits will further decline .Profits will be there until there is no profit .
We are in resection, its that simple . The economy is not doing well , its all based on low interest rates , mal investment , easy credit .
What can the government do ? nothing .
Infrastructure spending and forcing full employment with government created currency just injects more currency into the system, inflation .Sure governments under the fiat monetary system can create currency but it just migrates to the broader economy . So prices on all goods will rise , price rise are the effect of inflation . It will speed up the inevitable , the bust .
It's stagnant now...
Too many renters in Australia
A propertocrasy is the Australian way.
BS a lot has changed in 12 months!
wouldnt be surprised if he lost his job after this.....
He owns the company
The time has come. Execute order 66.
Ponzi scheme