Gathering Pace

Everywhere you look at the moment the world is gathering pace, and that includes property prices in Australia. How could it be any other way.

Quick snapshot, Europe has been growing positively for over two years now, Asia continues to boom with China holding up strongly and other Asian nations re-accelerating, and then the USA with full employment and booming services and very strong manufacturing.

Not bad for a world that was supposed to be collapsing.

Where does that leave Australia?

Apparently the RBA just fund out the official cash rate should be 1.5%. We all knew this at least two, if not more, years ago. The fact that the RBA finally belatedly dragged itself over the line to cut, says to me that the recent upswing in the Australia economy actually has strong legs. I mean what better indicator of the future outlook for the Australian economy do we have, than the RBA getting it wrong.

But wait… There’s a new Governor of the RBA, and Yes, you guessed it, he is the ultimate “Yes Man” himself. Rising up through the ranks, working with charts, and making models of the past, and always agreeing with the cutting intellect of Glenn Stevens?

At some of my talks I have suggested we should be careful of what we wish for, in regards to getting rid of Stevens. We never got rid of him. He stayed an agonising ten years. Now at last, he has been set adrift. The damage wrought the Australian people was immense. Stevens achieved nothing. Everything good about Australia during this period was set by global events. With Stevens always trailing behind. Enough said. What about Lowe.

Well if he realises Stevens was a Goose, and was just quiet about it all this time, then there is hope. If he worships Stevens, then he will simply follow the data with a lag, as all of his speeches over the past two years have done.

At least we have a reasonable Australian economy at the moment. Made so by ordinary working and business people. If we depended on our politicians or the RBA, we wouldn’t stand a chance. We will also be helped by continuing strength in the commodity market. Which means an on-going mining boom in terms of exports, and accompanied by a stronger domestic economy than we have seen in some years.

It is as if the economy could sniff that Stevens was leaving? Perhaps it was all of us working hard and Stevens just had no idea regardless.

In the end though, we have amazingly low interest rates in quite a firming to strong economy, with on-going and increasing overseas interest in migrating here and investing here.

So which way do you think property prices are going?

Clifford Bennett