The housing market has been on a steady incline for over a decade. There’s no disputing that. And even though the last 10 months has seen a small decline in house prices, they still remain high.
For over a decade, Australia’s housing prices were on the up. They soared higher, in absolute terms and in comparison to incomes, than Aussie real estate markets had ever been.
Growth is up. Spending is up. Savings are down. In fact, savings as a ratio of income is just 1%. Here’s some high-level maths for you; a person on $100,000 a year is saving just $1,000.
So, if you’re an Australian keen to buy your first property, maybe now is the time to sit back and watch the market correct itself. But remember, a housing crash wouldn’t just hurt investors and homeowners.
This is a controversial view as it has the potential to undermine the stability of our whole nation’s economy. Our banking sector is built on a foundation of housing mortgages.
Yesterday I mentioned that some of last year’s dog stocks could become winners. However, I won't be buying yet. A downtrend is a low probability play, no matter how appealing the value.
The Reserve Bank continues to hold the official cash rate at 1.5%. What’s going on? Is this as good as it gets for the Aussie economy?
How do you then pick a company with personality? Well, they don’t necessarily have to look the best. But they do have to have a business which gets better over time.
The smart money flow index has just plunged. There’s a risk that you’re going to see another leg down in US stocks very shortly. What will happen next?