Real estate business Domain has officially listed today, opening at $3.80 per share. Giving it a market cap just shy $2.2 billion.
Bad debts are at historic lows, and it’s proving a big windfall for the big four. But you have to think, if house prices had gotten so high and had the consumer stretched to breaking point, you’d expect bad debts at the big four to be rising, not falling!
For years, there’s been no more reliable investment class in Australia than residential property in our major cities. But increasingly, it looks like 2017 could be the year that changes.
That’s why the market has put in a strong rally recently. It sees a decent economy and a central bank on hold. It’s the classic goldilocks combination that the market loves. Which is why I think you’ll be seeing new highs in 2018.
The boom times are here for everyone it seems…Well, not everyone. The poor old Australian stock market is lagging behind in this period of record highs. In fact, it still needs to rise about 17% to get to the levels of 10 years ago.
Even if you’ve taken your profits out of property and invested them elsewhere, you still can’t afford to ignore this issue. With so many Australians holding mortgages, and the big four banks making up such a large part of our economy, any shock that starts in housing could spread across the entire country.
As a former financial planner, some of the greatest value I could add to my clients’ portfolios was by reducing their tax liabilities. Both current taxes and future ones. But there’s a difference between a good tax strategy, and investing because of a tax benefit.
A daily commute from Sydney to Melbourne will be feasible. It’s just a small part of a technological revolution slowly creeping into modern life. And it could be game-changing. This new technology could have a very strange effect on future Australian property prices.
The main thing holding the RBA back from moving right now is weak household spending. That’s largely because of the huge debt burden households are carrying.
Investors in Australia’s banks — who are likely homeowners as well — need to think carefully about how exposed they are to this sector. Bank profits are built on Australian property.