A Morgan Stanley report says Australia's housing boom has peaked

MS cites:

  • Tightened lending standards have cooled the market (many lenders have hiked interest rates for investors and made it harder for them to get loans while cutting rates for owner occupiers )
  • Lower net in-bound migration

"We are now calling the peak in the housing cycle, and expect further falls in auction clearance rates and house price momentum, with a negative impact on construction occurring over 2016"

"We believe recession risks are elevated as regulators attempt a difficult soft landing of the housing market amidst external and income challenges"

Morgan Stanley says argues fiscal stimulus is necessary

  • Predicts new prime minister Malcolm Turnbull may use the mid-year economic forecast in December as a mini-budget
  • (Note Turnbull on Monday said it was not something he had considered)

Says the RBA will need to cut rates by another 50 basis points by mid-2016

  • MS predicts unemployment will rise to 6.8% (from 6.2 now)
  • Says growth will likely miss forecasts

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That's it in summary, but there is more from Business Spectator, here