Oliver's Insights
Oliver's Insights
After a roughly 35% plunge from their February high point to their lows around 23 March on fears regarding of global recession on the back of the coronavirus shutdowns, share markets have since rebounded sharply, led by US shares. The rally has pushed the Australian ASX 200 back through 6000 for the first time since...Read More
Back on 19th March when we first looked at the impact of the intensifying shutdown of the Australian economy on the housing market (see here) we concluded that the impact would depend on how high unemployment rose. Our base case was a recession that saw unemployment rise to around 7.5% and would push average home...Read More
There has been much debate about the short-term economic and investment impact of coronavirus – on economic activity, unemployment, interest rates, house prices, shares, etc. However, the magnitude of the shock means it will have medium to longer-term implications as well. Of course, there is a danger in placing too much weight on current circumstances...Read More
Last night would have been Budget night and the Australian Treasurer would have been announcing budget surpluses. Of course, coronavirus intervened, and the surpluses rightly had to be sacrificed to support Australian households, businesses and jobs. And it makes no sense to provide detailed budget forecasts given the extreme uncertainty about the impact on the...Read More
Back in January when the bushfires were raging, I feared Australia’s luck had ran out. But right now, I thank god I live in The Lucky Country! Donald Horne’s original conception of the term in the 1964 book of the same name about Australia being run by “second rate people who share its luck” always...Read More
This is an update of a note I wrote last November, but after the recent plunge in shares and the associated 10% or so loss in balanced growth superannuation funds through the March quarter, it’s particularly relevant now. When share markets plunge as they did into March the standard questions are: What caused the fall?...Read More
The blanket coverage of coronavirus and its impact on the economy can lead to a lot of confusion right now. Some reports are hopeful of anti-viral drugs, others say a vaccine is at least a year away. There is talk of curve flattening but still rising cases and deaths. There is news of an easing...Read More
Along with massive fiscal stimulus globally to deal with the impact of coronavirus shutdowns on the economy, the last month or so has also seen massive monetary easing – with the latest being the US Federal Reserve expanding its emergency lending program to $US2.3 trillion. The economic shutdowns are necessary to slow the spread of...Read More
Along with the horrible human consequences, the coronavirus pandemic is having a huge impact on the way we live and as a result investment markets. This has raised a whole bunch of questions: why does a big part of the economy have to go into “hibernation”? how long might it be for? how big will...Read More
The threat to Australian house prices from Coronavirus
March 19, 2020
The Australian housing market was boosted from mid-last year by the combination of the Federal election removing the threat of changes to negative gearing and capital gains tax, rate cuts and regulatory easing. So, after a 10% drop in average capital city prices into mid last year - the biggest fall in property prices for...Read More