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, July 2, 2012
Goldman Sachs: Early signs rate cuts are supporting housing market
In momentum terms, the most important development in the past month has been the apparent improvement in momentum in prices in Melbourne (with a +1.7% recovery reported since a trough on 11 June). Looking through the near-term volatility, however, prices continue to be more resilient in Sydney and Perth.
There is growing evidence that house prices are in the process of stabilising and we have become less bearish on the outlook. We note:
*The daily data confirms a steady trend appreciation in prices in June, despite it typically being a seasonally weak month;
*Auction clearance rates have clearly improved;
*After the government increased the taxation and reduced the attractiveness of superannuation investments in the May Budget (May 8), this has increased the relative attractiveness of investment housing as an asset class.
*The rising income and rent but flat to declining house price environment of the past two years has helped to improve the affordability of housing for owner occupiers. With the RBA having cut rates by 125bps since late last year, this will further boost affordability and the confidence of the household sector more generally.