The housing boom ends, signaling financial turbulence ahead
Australian property prices are falling at their fastest rate for five years, thus putting a definitive end to the debt-fueled housing boom. My concern is that this reversal has only just begun.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
jimbo james
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Hold the press, the great saviour, former Property Council of Australia guru Scott Morrison assumes the helm. Expect nothing less than the kitchen sink to be thrown at Mr Market. Followed by the benchtop, appliances and even the fridge. What a bonfire it’ll turn out to be!
Rajneesh
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Do you believe falling dollar could lead to imported inflation and force RBA’s hand ?
Roger Montgomery
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There’s always more than a single factor the RBA board must consider so a falling Aus alone would probably not be enough.
Robert Stevenson
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Great article Roger. I really wonder why the government hasn’t done more to address this housing affordibilty crisis. Who do they really working for? There’s thousands of apartments that are being built every year, surely there should also be an equivocal focus on affordable public housing initiatives. Not everyone can just “get a good job that pays good money”.
Jon E
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The Government can’t afford to let housing prices drop.
Alot of the baby boomers entering retirement have all their money tied up in their houses. If prices drop there’s more load on pensions and the gov to provide.
I think this is one of the reasons.
Roger Montgomery
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Well if the ALP wins you can kiss goodbye any dreams you have of the government doing anything to protect the wealth of those “evil rich retirees” getting fat franking credit Cheques every year!
Chris
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Not just retirees, Roger, it’s all of our super funds. The issue of franking credit refunds is one that affects ALL generations – boomers, X,Y,Z etc.
For once, we actually have something that might unite us, rather than the incessant ‘pitching generations against each other’ in a blame game.
People need to wake up, the politicians will only do things that benefit themselves, they don’t care about the general populace. It’s modern feudalism.
Jon E
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Couldn’t reply to your comment here roger, so replied to mine.
It’s unfortunate, but i think they are going to lose my vote on this one issue. Well my preferenced vote anyway, normally neither primary party get my primary vote anymore. As someone who’s goal is early retirement, this bump in effective tax rate post retirement is going to make a difference.
Chris
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Great news, bring it on.
I own a house but I’m not selling any time soon, and we need a good crash to sweep the cobwebs out of some of these overpriced asset markets (like the general S&P500).
John
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Agree waiting with bated breath for the opportunity