Thread by @AlexSaundersAU

Australian Economy Thread #ausbiz #auspol #housing #business
As we have be warning about for a while now house prices are falling at the fastest rate in 35 years. But so far the knock on effects for the economy aren't noticeable. Many regions are still experiencing strong... 1/6

growth such as Tassie as we shared last week. The bank restrictions on interest only & investment lending have been reversed in an attempt to re-inflate markets. Bank lending standards led to a Royal Commission so many are unhappy that regulators are telling banks to lend... 2/6

more again.
Property investment makes up a far larger percentage of our economy than most countries so many expect this weakness to spread as investor portfolios unwind. The only factors that can turn this around are strong immigration & real wage growth. Both of which are... 3/6

relatively weak. We are told inflation is low, but as anyone in the real world knows the cost of living is going up far quicker than wages. Notably, housing is just one of the items that has been removed from inflation statistics so they appear lower.
Now, we are waiting... 4/6

to see to what extent households bunker down when they realise they've spent too much on their house, car, student loans & credit card.
This all pulls money out of circulation as people try to pay down debt & doesn't bode well for the already collapsing (literally)... 5/6

construction, retail & manufacturing industries.
Keep an eye out for big government promises coming into election time, lower interest rates & money printing if things continue to slide throughout 2019.
What do you think about the current state of the Aussie economy? 6/6