Yes, interest rates fell. But what do we know?
The local economy is tough. Overseas markets more so. Or is it more about structural change than cyclical factors? Ditto Australia’s housing markets.
Australians are saving at near-record rates. Budget cutbacks means less fiscal stimulus. We are spending money but on different things — travel and online goods, not local produce and especially not new housing (or established housing, for that matter).
We are paying down our mortgages, and taking on new debt is way out of fashion. Inflation looks contained — well, for now.
Established house prices are starting to rise — up more than 3% since May or close to 9% on an annualised rate. Population growth across Australia is on the rise again. The Aussie dollar remains high.
Very few people are admitting they like Alan Jones right at this minute.
For mine, this week’s drop in official rates will have very little impact on our economy. The banks are limited as to how much they can pass on. Rates are expected to fall again in November.
True, a rate drop is better than a rate rise, given our current collective frump. But what we need is a boost to our confidence. A fall in interest rates won’t do it. This week’s fall and even next month’s is already factored into our expectations. It’s like having meat and three veg for dinner, the usual and so ho-hum.
Confidence, that’s what is missing and for the life of me, I don’t see it on the horizon and regardless of what direction I look. I definitely don’t see in when I look south towards Canberra. I was hoping to see it in George Street, but maybe my expectations were set too high. I am not seeing it across the Pacific. Heck, I cannot even watch a footy match these days without someone getting their ear nearly bitten off.
Without being s-xist, Tom Waits has got it right — “there ain’t enough raised right men”.
We need to build something — another Snowy Mountains something. Or really attempt to solve a major human suffering — and something tangible, such as infant mortality or AIDS — and not the nebulous such as climate change. We need a plan and a leader to articulate and implement it. Branson and co need to step up. No politician — well, not out of the current crop — is going to do it. Ditto those mining magnates.
We need our own Springsteen. Where’s Midnight Oil when you need them? Come on, Pete — give up your day job! But before I get higher on my high horse …
All the ingredients are there for another housing upturn — low rates; high yields (often now positive); a rising population growth rate; soft housing starts; very tight vacancy rates; higher rents and now rising end prices, and yet I will get more “spruiker” direct email replies from this post than “high fives”.
It’s a strange world we live in these days for sure.