Robb: Australia a China safe haven

I know it’s the job of pollies to prop up confidence when things turn a little rocky but let’s at least keep the comments credible, from Andrew Robb:

“Everyone has been anticipating some sort of correction up here so I don’t think it’s a surprise now that it’s happened,” he told Hong Kong radio station RTHK on Wednesday morning.

“What I think will happen out of this correction is that even more money will be looking for a safe haven in Australia,” he said.

“My expectation is that this will accelerate the level of investment inquiries coming into Australia across all sorts of areas of activity.

In tourism, sure. Everything else forgedaboudit. The dollar isn’t falling because capital is piling in, Andrew.

Houses and Holes

Comments

  1. There is nothing Australia can’t offer the world in any situation. This morning on RN Chris Bowen was echoing Hockey on Australia’s resilience and difference. When Bowen agrees with Hockey it’s time to get a one way flight out.

    • Gen Y Home Buyer

      Guess who opened up Australian real estate to temporary residents? Chris Bowen. Well doen Laboral.

    • What happens to your plans for an Australian education if mum or dad just lost the college fund on the SSE, along with their retirement savings?

      • Learn Ruby/Rails and PHP or whatever you want and start creating stuff.

        Or, start growing food.

        Or, get a trade.

        Will always need to turn lights on and flush poos and wees down the pipes.

      • Yeah I guess but I sort of meant that stony broke former middle class chinese parents are likely to reconsider sending their kids to australia for the worlds most expensive English lessons

  2. A Unicorn pissing rainbows, how apt.
    Well done H&H.
    I didn’t think you could top yesterday’s falling Panda’s.

    • Yep and he’s meant to be one of the “smart” ones. So he’s saying that the country in the world most dependent on China’s economy is a safe haven when China’s economy starts to fall apart. I wonder if he genuinely believes what he’s saying.

      • What what what?

        Robb intelligent?

        Hmmm.

        Allow me to conduct a quick desktop analysis based on observations and data.

        Computer says: No.

  3. maybe there is a little credibility to what he is saying.. not difficult to see that if you are cashed up in China, you have lost faith in Chinese property, Chinese investments (aka wealth management products) and the Chinese sharemarket. And you talk to your friends who are all making paper money on the Australian property market, it starts looking like a good bet. To that investor, Australian property has only risen so it will be attractive to the local alternatives.

    • “And you talk to your friends who are all making paper money on the Australian property market, it starts looking like a good bet. To that investor, Australian property has only risen so it will be attractive to the local alternatives.”

      And then you realise that Sydney property has basically been flat in CNY terms and has actually fallen in other cities. And you think about where the AUDCNY exchange rate is likely to go in the next few years. And given that you’re smart enough to be “cashed up” then you look elsewhere for places to invest your money.

      http://www.businessinsider.com.au/for-chinese-investors-sydney-and-melbourne-property-prices-havent-moved-in-three-years-heres-why-2015-6

      • its a very good point…. but to quote your own article reference:

        ‘Indeed. Along with other factors, relative stability in the AUDCNY exchange rate for one, it goes a long way to explaining why Australian residential property is so attractive to Chinese investors, and why their involvement looks set to increase.’

        So if the Chinese govt is moving more toward a creeping peg against the USD, the CNY depreciation should closely match the AUD from here on in, leaving property fx neutral and permitting upside on capital values. I would also suggest the fx related depreciation in Aus property is a far cry better than the actual deprecation in their SSE portfolio.

        Pretty sure the average Chinese property punter isn’t thinking too hard about the fx adjusted real return on Aus property…

      • And being super smart, you realise that it’s more than where ” the AUDCNY exchange rate is likely to go in the next few years.” It’s also where the target asset price is likely to be as well! ( That’s assuming that you buy one of the legally procurable items, of course, and don’t have to watch too many of your friends having to surrender their previous smart purchases under threat of prosecution) You’ve seen what can happen to the China property market and the China Stock X and now you wonder “Could that happen to Australian property from these historic, over-valued highs as well?”

      • “Pretty sure the average Chinese property punter isn’t thinking too hard about the fx adjusted real return on Aus property…”

        Pretty sure that the average Chinese property investor doesn’t have the ability to easily move hundreds of thousands of dollars offshore in order to buy (likely illegally) Australian property. And if they did, why is Australian property the only choice? Why not US property which is far more reasonably priced and the USD is most likely to appreciate relative to other currencies?

      • @AB….

        Wolf Richter: Foreign “Smart Money” Frets about Turmoil at Home, Flees, Plows into US Housing Bubble 2, Thinks it’s a “Safe Haven”
        Posted on August 23, 2015 by Lambert Strether

        Lambert: Just what we need; more 1%-ers. And if turmoil in emerging markets keeps up, we’ll have more of ’em, as conditions “at home” sharpen.

        By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street.

        Wealthy, very nervous foreigners yanking their money out of their countries while they still can and pouring it into US residential real estate, paying cash, and driving up home prices – that’s the meme. But it’s more than a meme as political and economic risks in key countries surge.

        And home prices are being driven up. The median price of all types of homes in July, as the National Association of Realtors (NAR) sees it, jumped 5.6% from a year ago to $234,000, now 1.7% above the totally crazy June 2006 peak of the prior bubble that blew up in such splendid manner. But you can’t even buy a toolshed for that in trophy cities like San Francisco, where the median house price has reached $1.3 million.

        And the role of foreign buyers?

        [N]ever have so many Chinese quietly moved so much money out of the country at such a fast pace. Nowhere is that Sino capital flight more prevalent than into the US residential real estate market, where billions are rapidly pouring into the American Dream. From New York to Los Angeles, China’s nouveau riche are going on a housing shopping spree.

        So begins RealtyTrac’s current Housing News Report.

        “For economic and political reasons, Chinese investors want to protect their wealth by diversifying their assets by buying US real estate,” William Yu, an economist at UCLA Anderson Forecast, told RealtyTrac. “The best place for China’s smart money to invest is the United States.”

        In the 12-month period ending March 2015, buyers from China have for the first time ever surpassed Canadians as the top foreign buyers, plowing $28.6 billion into US homes, at an average price of $831,800, according to the NAR. In dollar terms, Chinese buyers accounted for 27.5% of the $104 billion that foreign buyers spent on US homes. It spawned a whole industry of specialized Chinese-American brokers.

        http://www.nakedcapitalism.com/2015/08/foreign-smart-money-frets-about-turmoil-at-home-flees-plows-into-us-housing-bubble-2-thinks-its-a-safe-haven.html

    • Same articles appeared during the Japanese ‘correction’.

      There is no safe haven for money that is not there AND the Chinese money already here will be pulled back to cover leveraged investments and margin calls. It was carnage here last time round. It will be carnage here this time round!

      • possibly in the long term.. but the point of the article was saying whether Aus is a safe haven. Of course its stupid to say Aus is a safe haven from China given the links, but it is for now, still a destination the Chinese will want to invest in, particularly property. Wishing it wasn’t so won’t make it real.

      • @Jim
        It entirely depends on how much money slated for the future purpose of buying Australian property is has been lost on the SSE and how much extra money is left over after covering epic margin calls. There is no sense in Robb’s spouting of Australian exceptionalism when the circumstances have yet to play out.

  4. “The dollar isn’t falling because capital is piling in, Andrew.”

    Are you saying it was previously high because people were piling in ? As opposed to interest rate spreads ?

    Interesting slip.

  5. Game over. Australia is stuffed. Kids…..leave.

    This place is a haven for all things boomer.

    No other gen is relevant.

    If noosing was legal, if euthanasia viable, if execution valid for crimes like national economic treason, intergenerational theft, the farm and job sell-offs, the sustained by-design and vested-interests turning of a blind-eye to illegal property investment for as long as possible without any intervention (only now to disrespect the public’s intelligence so much to think you are saving the day with increased FIRB power), the blatant disregard of our kids prosperity, then the future state of weasels like Andrew Robb, Joe Hockey, Abbott, Shorten, Mark Bouris, John Symond etc…. woud be tenuous at best.

    Name one of these who are true advocates of our youth??
    Name one that is NOT self-serving??
    They are all atrocious in the extreme.
    And we continue to put up with this shit.

    If this is the extent of Australia’s capacity to deliver talented people to the politcal arena.
    If this is the depth of our political talent, where bubblised individuals are the faces of those of whom they share no connection, not one sceric of overlap in daily living experiences, then the future for Australian kids and youth is totally stuffed.

    Have a look at their ineptitude?

    Seriously, name one major reform any of these mental dwarfs have done that affects youth positively and affects their long term prospects?

    The only game in town in Australia is this ridiculous thing called property, and its a game where the players dont include youth. Its confined to a few groups – you know, the BB elites and illegal chinese property investors. The same groups that dont care outbidding youth at auctions, and dont think of the broader societal ramifications of intgenerational capability deprivation, youth mental health issues etc etc. It never crosses their radar…..EVER. No. The only important thing is “my” next decision, and what “I” want to do.

    The selfishness of our society is at breathtaking proportions.

    We are a self-centred, hedonistic, narcissitic society who could not care less about our neighbor.

    Mary Poppins would do a better job. And I am serious.

    Look at the self-serving nature of our politicians.

    Look at the electorate’s deluded, persistent futile hope by entrusting their votes to go the major 2?

    This is utter lunacy.

    Noone in politics with enough balls to stand alone, is.

    They are ALL gutless, subservient weaklings. When asked to stand alone, they will cower with such swift elegance it’s seamless presentation can only be concluded as genetic.

    Why on earth do we keep voting for idiotic, growingly irrelevant, disconnected parties????

    And you wonder why youth form gangs, do drugs, feel disempwered, dsconnected?

    If your solution is a feeble “get a job”…..you are part if the problem.

    The problem is so much larger than a convenient, lazy, shallow, but all-too-typical boomer response from those that have no real connection with those that desperately need to feel connected.

    Kids, on behalf of a generation I am not part of, I apologise for their reluctance to present the realities of their inaction to play your advocate. Where they could do more, they wont. Where they could wield their political and financial interests, they dont.

    Where they fail, we will not.

      • They have to.

        Leave this mess to boomer elites that just love to expose their defensive self-interest, a pitiful attempt at justifying boomer inaction, and exhibit legal drivel that just shows how out of touch with the common man they really are.

        The century of the myopic, self-absorbed bubblised hedonist is a boomer gen personified.

    • The Century of the Self – Psychology

      This series is about how those in power have used Freud’s theories to try and control the dangerous crowd in an age of mass democracy. Sigmund Freud, the founder of psychoanalysis, changed the perception of the human mind and its workings profoundly.

      His influence on the 20th century is widely regarded as massive. The documentary describes the impact of Freud’s theories on the perception of the human mind, and the ways public relations agencies and politicians have used this during the last 100 years for their engineering of consent. Among the main characters are Freud himself and his nephew Edward Bernays, who was the first to use psychological techniques in advertising. He is often seen as the father of the public relations industry.

      Freud’s daughter Anna Freud, a pioneer of child psychology, is mentioned in the second part, as well as Wilhelm Reich, one of the main opponents of Freud’s theories. Along these general themes, The Century of the Self asks deeper questions about the roots and methods of modern consumerism, representative democracy and its implications. It also questions the modern way we see ourselves, the attitude to fashion and superficiality.

      Happiness Machines. Part one documents the story of the relationship between Sigmund Freud and his American nephew, Edward Bernays who invented Public Relations in the 1920s, being the first person to take Freud’s ideas to manipulate the masses.

      The Engineering of Consent. Part two explores how those in power in post-war America used Freud’s ideas about the unconscious mind to try and control the masses. Politicians and planners came to believe Freud’s underlying premise that deep within all human beings were dangerous and irrational desires.

      There is a Policeman Inside All of Our Heads, He Must Be Destroyed. In the 1960s, a radical group of psychotherapists challenged the influence of Freudian ideas, which lead to the creation of a new political movement that sought to create new people, free of the psychological conformity that had been implanted in people’s minds by business and politics.

      Eight People Sipping Wine In Kettering. This episode explains how politicians turned to the same techniques used by business in order to read and manipulate the inner desires of the masses. Both New Labor with Tony Blair and the Democrats led by Bill Clinton, used the focus group which had been invented by psychoanalysts in order to regain power.

      http://topdocumentaryfilms.com/the-century-of-the-self/

      Skippy…. Hope this clears up some of your queries…. might stop you from attacking the victims and miss applying blame…

      • @Steernorth,

        You seem insistent on blaming consumers and not the producers, which is further complicated, by you not showing how you arrive at your suppositions.

        Skippy…. or do you expect me to – “believe” – what you say.

      • Aussie1929MEMBER

        @Skippy I dont think you were condescending enough. Maybe you should start cursing at Steernorth

      • Yes, thanks for the link. Having just watched the first episode, the others are on my view list.

      • Aussie1929
        August 26, 2015 at 4:29 pm

        @Skippy I dont think you were condescending enough. Maybe you should start cursing at Steernorth

        Skippy…. Oh I know that trick, next you’ll call me a heretic or deviant for calling out proselytizing, not getting sucked into that action imo.

      • SoMPLSBoyMEMBER

        Coursera like Skip-appreciated!
        Amazed at how far we’ve progressed.
        The ‘Century of the Self” is now life in the Matrix.
        Look at ‘you’ now!

      • @SoMPLSBoy

        Please don’t put me in the same category as Coursera and mobs like the khan academy as its an indoctrination portal.

        “Don’t Use Khan Academy without Watching this First

        By Justin Reich on June 21, 2012 9:14 AM | 21 Comments

        In previous posts, I have summed up my position on Khan Academy as follows: Khan Academy teaches only one part of mathematics—procedures—and that isn’t the most important part. Writing about mathematics, developing a disposition for mathematical thinking, demonstrating a conceptual understanding of mathematical topics are all more important than procedures. That said, procedures are still important, and Khan Academy provides one venue where students can learn them. In the end, I think every young person should have an account there. Even if only one in a thousand or ten thousand benefit, that would be a terrific outcome. (I pretty much said that verbatim in Shrewsbury on Tuesday in my flipped workshop. Ask Derek.) (There is a response from Khan in Updates at the bottom)

        I’m adding a new plank to my KA platform: no teacher or administrator should use or support the use of Khan Academy videos without watching the first episode of Mystery Teacher Theater 2000 or MTT2K. (Tip of my hat to Dan Meyer for leading me to this story.)

        In a send-off of the Comedy Central classic Mystery Science Theater 3000, two teacher-educators sit in front of a Khan Academy video on multiplying and dividing positive and negative integers and offer their critical commentary. Dave Coffey and John Golden are the hosts here (they really do need at least one talking robot), and they clearly are not big fans of Mr. Khan or his patron Mr. Gates.

        The two teachers systematically dissect the video, noting a variety of missteps. There are a few unquestionable errors of mathematics: Khan uses incorrect terminology at a couple of points. Khan is also inconsistent in his language about positive and negative numbers (using plus when he means positive, or minus when he means negative), which is perhaps a lesser sin, but poor practice and misleading for students. He’s also inconsistent in his use of symbols, sometimes writing “+4”, sometimes writing “4”, never explaining why he does or doesn’t. He making the kind of mistakes that would reduce his score on the Mathematical Quality of Instruction observational instrument, used in the Gates-funded Measures of Effective Teaching Project. ”

        http://blogs.edweek.org/edweek/edtechresearcher/2012/06/dont_use_khan_academy_without_watching_mmt2k_first.html

        Skippy…. neoliberal ihole port cortex injection algo… barf~

      • SoMPLSBoyMEMBER

        OK Skip Point taken. Thanks again! Most of us are 3000 level students and enjoy your 5000 level ‘grad’ /’phd’ lectures /positions. There’s a lot to learn Skip-keep ’em coming hombre! Love your ‘red ink’ corrections! Gracias!

      • It’s time for something of major impact to happen in this place we call Australia.

        On a road to nowhere puts it mildly.

    • Totally agree – Bureaucrats too! The wombat burrow has needle depositories just like dingy holes in the Cross………… I wonder if they’ve ever tested what’s in them………..

  6. China goes up = buy property, chinese demand!
    China goes down = buy property, more chinese demand!
    Interest rates down = buy property it’s going up!
    Interest rates up = buy property before you miss out!
    Stock market up = too expensive, buy property!
    Stock market down = investors are rushing back to property!

    Buy property.