From Mr Joye:
Much-maligned auction markets also remain in rude health. Last weekend’s 70.7 per cent clearance rate was way above the 59.8 per cent average since 2008 and notably identical to the outcome achieved this time last year. With tighter lending rules and a temporarily frozen Chinese bid (their government is trying to thwart capital flight), capital gains will likely decelerate from their current double-digit pace back to around 3 to 4 times wages growth. Property prices will stay well supported by the cheapest home loan costs borrowers have ever seen, a much lower Aussie dollar that stimulates expat and foreign demand, and the illusion that bricks and mortar, which does not get regularly revalued, is safer than the high-frequency and brain damage-inducing volatility of the sharemarket (and super portfolios overexposed to it). With banks needing to maintain asset growth and the RBA dovishly neutral, this boom will continue for some time yet.
The brain-damaging share market volatility will catch up to property in the end because behind it is brewing global dislocation that will ultimately shock households into their bunkers.
