This week we saw some data suggesting the Sydney property market hit an “air pocket”?
Sounds scary, doesn’t it?
Well, all that happened was that Core Logic’s estimate of property values from one month to the next, which all seems a bit pointless in the first place, was done a barely registrable 0.7%.
This is absolutely nothing and probably means in the real world property prices are just as strong. Yet, from the headlines and introductions on various media sites, you would think something diabolical had happened.
Now, this is fantastic for those of us who are investing. It confirms the general thrust of media bombardment remains negative. Which as we know leads to a backlog of potential buying still to come to market.
Meanwhile the US stock market, and stock markets around the world, as well as the general economic environment, globally look like an absolute economic boom period. This is where the major directional forces for the Australian economy and property market come from. The state of the US, China and global economies.
China PMI data for manufacturing and services confirm our forecast economic acceleration and on-going robust boom. China’s official manufacturing Purchasing Managers’ Index for November was at 51.8. The services sector also saw activity pick up, with its PMI reading accelerating to 54.8.
Following on from sky-high US data, we clearly have forecasts for Global Boom! With US Senator John McCain now onboard for tax reform, we have moved significantly closer to this historic event. This is about much more than changing a few numbers. This is about showing that what people thought could not be done, hard political stuff, can, in fact, be achieved.
It’s a great example for Australia, but it is an example Australia could have set for the USA. We have been arguing for this for nearly a decade at the highest political levels. Including the Department of Treasury. A feeling of “it’s too hard” is the lethargy responsible.
Meanwhile, in the USA they are doing it all of a sudden because they understand the competition that is being brought by China and Asia. We live here in Asia, and our politicians still haven’t figured it out.
The impact on the US economy, corporate profits and stock valuations is going to continue to be dramatic. We remain aggressively bullish. Remember, Dow Jones 30,000 by the end of the decade. It is currently at 24,000. Dow Jones, all as forecast, the chart says it all!
Clifford Bennett
