A piece from a commentator in an Aussie fish and chip wrapper today:
My greatest fear for the Australian economy - a significant fall in the rate of home building - is starting to take place.
If it gathers pace we will see a rise in unemployment, defaults on bank mortgages and, of course, state governments will have lower stamp duty revenue so will be squeezed for money.
Ya ... doom and gloom. Rinse, repeat. It sells noospapers.
The gist ...
I can't recall such a widespread vigorous attack on any Australian industry
Chinese demand ... has been hammered
- first by increasing regulations from China on taking money outside the country
- second by the refusal of the Australian banks to fund the Chinese
- and finally by a series of taxes and charges being imposed by state governments to make sure the Chinese feel unwelcome
- The overall Chinese apartment demand has now approximately halved.
- There has been a rise in Australian local investor demand from a low starting point but it nowhere near fills the China gap and local investor demand is being hammered as banks are under instructions from APRA to adopt a much tougher line on approving investor loans. At the same time, banks are also increasing the interest rates charged to investors while the ALP plans to curb negative gearing.
Link if you'd like more: My greatest fear for the Australian economy - a significant fall in the rate of home building - is starting to take place.
Just a heads up if you're interested
