The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Monday, October 25, 2010

The difference between higher interest repayments and housing affordability

RBS's two gun economists, Kieren Davies and Felicity Emmett, make a good point about the difference between looking at (a) interest repayments as a share of disposable income and (b) housing affordability, assuming that the cash rate rockets to a sky-high 6%. RBS's forecasts in this regard are right at the top of the consensus economist range, so this might be regarded as a worst-case scenario. The point is that while interest repayments as a share of income might be at all-time highs, affordability would still be substantially better than it was in the late 1980s and early 1990s.