As house prices tumble here comes the call for “stimulation”

by Chris Becker

You can’t keep a good economic Liberal down. Here’s the latest attempt to shore up the multi-trillion property market with the Treasurer calling for the banks to get cracking on those government subsidised printing presses. From Skynews:

Treasurer Josh Frydenberg is demanding banks stimulate ‘affordable and timely’ lending after revelations Australian house prices have suffered its worst year since the global financial crisis. Mr Frydenberg used the latest figures by CoreLogic to renew his attack on Labor’s election pledge to curb negative gearing, claiming the policy will worsen the housing market slide.

No carbon tax – that’s a distortion of price signals for the energy market! Stop subsidising car manufacturers – let the free market assign winners and losers! Retirement savings can be better run by my mates at Macquarie – trust me! Privatise the ABC! Because, yeah!

The cost of living under a roof is falling? Oh my, we can’t let that happen. We must intercede in the market!

Undoubtedly the pressure is now on the RBA to cut. But our L-plate Treasurer can’t wait for that. He wants sub-prime back today, before we’ve had the royal commission announce its findings, making him as corrupt as any banker in the RC’s sights.

Of course, the forthcoming election and Labor’s negative gearing reforms has nothing to with it!

Comments

  1. Josh is an a-grade a-hole in this regard. Like Morassan before him, like Hockey before him, like Bowen before him, like Swan before him, like Costello before him.

    They were all house-inflation loving bastards.

    • So a free market Liberal like Frydenberg is prepared to throw his principles in the toilet and interfere in the market when an election is due, eh?

      “Those are my principles, and if you don’t like them…well I have others.” ― Groucho Marx

      • St JacquesMEMBER

        Free market liberals like Friedbrains,,,,,.lol He wouldn’t even know what that (self-serving) slogan is supposed to mean anyway. What he really is is a real estate inflationista,

      • All free market liberals actually do the exact opposite of what they preach… Andrew Bolt when asked on The Weekly what it means to be a conservative could not even answer the question. It’s all made up B.S none of it actually adds up or makes sense. Basically the neoliberals believe in absolute freedom for big business and more wars while adding more and more burdens and laws onto the individual citizen.

    • Jumping jack flash

      The alternative was of course that the aged pension obligation would have destroyed us all.

      • Superannuation actually is costing more than if there was no super as it is nothing more than a tax haven for the wealthy or upper middle class on one hand and on the other a gravy train of riches for the fund managers and shareholders. It is a fact paying the pension would be cheaper as it sits currently due to missed tax revenue and afew other factors.

      • The other major factor is the Super money is tied up in cash and shares not being circulated around the economy. Yes a portion of the super saving would have been saved anyway, estimate maybe half the trillion $’s in super could be propping up small business instead who pay tax and GST.

  2. I’m kind of thankful the crash has started before the NG proposals, but it will still be linked. Labor would be smart to back away from it and try it on the second term (lets face it the libs are real stuffed) when the dust has settled.

    As for stimulus though, I rekon the tried and tested pump jimmigration and let foreigners buy our stuff again will work a treat with aussie dorrar discounts. I’m still a firm believer that when given the choice of more housing price drops/recession vs immigration, aussies will choose the latter. Right now, it’s not bad because most think they can weather the storm.

    • ‘ …given the choice of more housing price drops/recession vs immigration, aussies will choose the latter…’

      My feeling is most Australians don’t see a connection between unaffordable housing and massive immigration.
      Those aged under 30 would have no idea
      What the people seem to be averse to, is the loss of amenity, jobs and congestion

      • Agree. Under 30s are a clueless mob who are letting their futures slip away from under them. They spruik immigration and apartment living like it’s sangri-la and choose to fight political wars on fringe social justice issues.

        I agree most don’t really see the link between immigration, congestion and housing affordability, but those over 30 certainly do. It can be tolerated, but once new construction dies, the economy is really cactus.

      • But the under 30’s are most likely the ones that haven’t bought a house yet. It’s the just-over-30’s that have probably caved and bought a house by now; after all you can only delay the stages of life for so long. Ironically as the latest entrants to the party according to the age of the typical first home buyer in the stats even if they know immigration is bad they will lose the most should it stop probably.

    • Calvin by June 2020, 18 months away, Prices will be down 25/30% so it won’t matter anyway
      Who would pay 5% inv interest rates, stamp duty get a negative return with falling prices
      Even investors aren’t that stupid
      The investor is finished

  3. Lollll… I can picture the exact animated lunacy with which the last 4 sentences were typed.

    The problem for josh is, all the banks know he’s not going to be the treasurer for long so have stopped listening.

  4. Mining BoganMEMBER

    He’s calling…nay, begging for fraudulent lending behaviour.

    Why doesn’t just one journo point this out?

    • The eternal question. Maybe the Stefanovics can go rogue and do it. Unfortunately the journalist that everyone should be reading everyday, Michael West, just doesn’t have get the readers he deserves.

    • Journalism no longer exists. The media are purveyors of propaganda and strict editorial lines. Hard to see real humans being employed in the news business for much longer with AI now available.

  5. SENSIBLE: “”Propertyology considers the policies unnecessarily harmful and warned today that Sydney prices could plummet up to 10 per cent this year if the policies aren’t reconsidered.
    Conversely, a return to “sensible credit policy” by the end of March would limit the damage to 6 per cent.
    Pressley said a return to “sensible credit policy” would push Adelaide, Brisbane, Canberra, Hobart and Perth to positive growth and even double-digit results over 2019………Then there’s Treasurer Josh Frydenberg’s promise to return the Federal Budget to surplus this year, and a national population set to grow by more than 350,000 this year.””………………more than 350,000!

    https://au.finance.yahoo.com/news/australians-property-markets-will-boom-2019-002530723.html

    • Simon Pressley is a property spruiking PoS and I am enjoying his increasingly louder screams as his business model falls apart before his eyes. His type are clinging on to growth in puny markets like Tasmania and Geelong and saying “see, prices are still growing”

  6. Nothing will stop the falls
    Politicians tried to mess with nature and cycles
    I’d going to be brutal
    Mel I think will open 19 10% lower

    • yea, I’m hoping it’s irreversible this time, that the game is finally up, that the can has been kicked off that cliff at the end of the road.

      I want my children to live in a future where growth is still possible, not still it all from them now so that the boomers have luxurious retirements.

    • 10% drop in 2019, 12% drop in 2020 and 8% drop in 2021 is what we need … Trade war and low global GDP will make this possible!

  7. Why don’t you write and tell him to stop manipulating the market? I just did … and below is the response …

    https://joshfrydenberg.com.au/getintouch/

    Your views are important to me and I appreciate you getting in touch. I receive many emails and here’s how I manage them:

    RESIDENTS OF KOOYONG
    If you are a resident of the Kooyong electorate and you have received this automated response, this means that your correspondence, invitation or a meeting request has been received and will be responded to within a reasonable timeframe. If your issue is urgent, please contact my electorate office on 9882 3677 between 9.00am -5.00pm, Monday to Friday.

    The views of my constituents are important to me and can help shape the community we live in. Click here to complete my community survey.

    AUTOMATED EMAIL CAMPAIGNS
    If your email is part of an automated political mass-email campaign, generally, I do not respond directly to such emails, although I certainly see them and take note of them.

    PORTFOLIO CORRESPONDENCE FROM NON CONSTITUENTS
    If you live outside the electorate of Kooyong and you are writing to me in my capacity as the Treasurer, you should resubmit your email via this ministerial contact form.

    INVITATIONS AND MEETING REQUESTS
    Please forward your request to [email protected]nment.gov.au noting that during this period it may take some time to respond to your request.

    Josh Frydenberg
    Federal Member for Kooyong | Treasurer of Australia
    Electorate Office | 695 Burke Road, Camberwell VIC 3124 | t: 03 9882 3677
    Parliament House Office | Parliament House, Canberra ACT 2600 | t: 02 6277 7920
    Email: [email protected] | Website: http://www.joshfrydenberg.com.au

  8. Even StevenMEMBER

    So do the regulators do what the government wants, and relax restrictions on lending / turn a blind eye? Given government sets the regulators’ funding, I would think the pressure is intense. In fact, what if the government TELLS regulators to do / not do something. I presume they have to obey…

  9. Odd that it wasn’t a problem when prices were rising, doubling in Sydney in the last decade.

    No one thought to raise rates to cool things down to keep houses affordable, or to reign in the speculators, or limit the mainland Chinese money laundering.

      • proofreadersMEMBER

        Exactly. Straya takes gold, gold, gold every time for being the leading country for leaners, not lifters?

  10. Jumping jack flash

    So when did ludicrously high house prices stop being because of the dire shortages, ie the “sound fundamentals” that underpinned the market, and start being because of the availability of cheap debt?

    I only ask because there seems to be a lot of calls lately for greater availability of cheap debt to fix the problem and very little acknowledgement of an oversupply being the reason for the recent downturn.

    Furthermore, the “problem” of falling house prices is remarkably similar to the “problem” of rising ones – it is only a problem or not depending on perspective.

    “No carbon tax – that’s a distortion of price signals for the energy market!

    Stop subsidising car manufacturers – let the free market assign winners and losers!

    Retirement savings can be better run by my mates at Macquarie – trust me!

    Privatise the ABC! Because, yeah!”

    +1

    While the government didn’t intervene to fix the “problem” of rising house prices, I would be very disappointed if they then intervened to fix the “problem” of falling house prices. Let the market sort itself out.

    • The lesson from the gfc is that more cheap debt fixes everything. So we need more cheap debt. It’s pretty clear.

      • yep, just the same as more heroin “fixes” the heroin addict’s immediate problems.

        Nassim Taleb likened the debt creation after the GFC to giving painkillers to someone with a broken leg. They’re kicking the can down the road.

      • Are you saying that an influx of immigrants won’t keep the market propped up after all?

      • Dom – no, I think that the migrants can keep it inflated.

        I’m just making light of that d!ckhead Freudenberg.

  11. And here is the major problem with NG being exposed in front of everyone. A goverment policy that discourages investment diversification. All eggs in one basket. “Safe as houses.” Yeah right. All this panic over -10%?! Maybe because many multiply this num by number of properties they have so it is more like -20%, -30%. A lot of people swimming naked because of NG. And good luck getting out with all your eggs in such an illiquid asset.

  12. What crisis? The real estate agent I rent thru just spend two weeks relaxing at Noosa and is now heading off Aspen to cool down in powder snow.

  13. Why is the Treasurer or Australia using a private companies data/methodology to buttress his argument regarding…..well, anything really?

    His is the gosh darn Treasurer of a middle power….surely he has his own top quality data? Oh that’s right…..ABS has been gutted and its house data is deliberately corrupted to hide reality.

  14. When prices were rocketing up by 10% or more each year, there were articles talking about unaffordability, but mostly how good it was that the real estate market was so “healthy”. Now that prices have fallen by 10% which takes us back to what, a year ago? Two years ago in some places? – it’s now a catastrophe and something must be done to stop any further falls because if we head any closer to “affordable” that would just be a calamity beyond thinking about.

    In other words, prices were too high two years ago, but now they’re too cheap and it’s a buyers’ market, even a “bloodbath.” But now that many house prices have dipped below the $2 million mark, let’s see if the govt allows them to fall to below the devastating, rock bottom $1 million price tag.

  15. Proctologist around Australia wince whenever Propertyology or Simon Pressley get a media mention.

    Do Simon’s mates call him Elvis the Proctologist? I guess they’re careful when bending over with him anywhere nearby!

  16. The real corruption is in the monetary system. Sort that out and you sort a host of other problems out including widespread political corruption.

  17. SupernovaMEMBER

    The rantings of this treasurer clearly indicate he isn’t even qualified for L-plates. I say send him a few dummies and some boxes of huggies!

  18. My barber this morning had watched some morning TV and was literally “those ba$tard banks are not lending and causing prices to crash”

  19. So, to sum up:
    The banks must now increase lending on questionable assets because our entire economy is predicated on lending for questionable assets and not making them more questionable requires making them more questionable. Hmmmmm….. As fine a piece of can kicking as I’ve ever seen and a powerful portent of things to come.

    Mind you, forgetting the other 98% of the economy, I think the Baby Formula market is doing well. You now need to organize a ram raid to get your share to sell on to China.

    Great stuff. Advance Australia fair.

  20. Personally, I can’t wait to hear the sob stories.
    You know those smug arrogant sort, you come across at bbqs.
    Can’t wait to see them fall silent as that once smart ass smirk levels their motionless faces.
    Can’t wait for the financial difficulties stories.
    Can’t wait for the bankruptcies.

  21. I’m not sure what’s with all the indignation: we always were going to end up at precisely the place that we’re at.
    You can’t paint yourself into a corner and than wonder why the walls don’t suddenly give way to make room for your awesomeness and exceptionalism to simply expand and fill the universe.
    Our stupidity knows no bounds, but fortunately real world growth of anything is bounded, the time for the oh-F-it we need a real fix lest this thing blowup, moment was at least 10 years ago

  22. FyrenTurd and the POS fake Dr Andrew Wilson both need a urgent appointment with a .303 lump of lead …..

  23. proofreadersMEMBER

    “making him as corrupt as any banker in the RC’s sights”

    Precisely. It’s irrelevant to him (and the RBA) that the banks have been irresponsibly lending for yonks and that the quality of their existing mortgage books is likely questionable.

  24. And just like clockwork FrydenEGG comes out full support of keeping negative gearing and cgt concessions. Oh Australia, forcing me back to Europe to retire at 30, making this all too easy.
    Good thing aud dropped 6% against Euro past few weeks /s, wishing I kept a couple hundred there before I came back.

  25. The first bit of furniture (improved lending standards) is tossed onto the flames by Josh.

    That did not take long.

    But surely our independent regulators will resist this blatant attempt to influence the loan decision making processes of our private banks?

    Yes, they will insist nothing has changed while out in the market finance brokers will find applications getting a bigger tick more quickly.

    Have new arrivals slowed?. What about the FIRB?

    Though that sliding AUD might complicate things.

    Happy New Year!

    https://theglass-pyramid.com/2018/06/14/crystal-balls-when-will-aussie-house-prices-crash/

      • Same to you Peachy.

        I am waiting for a letter from Josh telling me

        “The Australian government is excited to let you know that you have been selected, on the basis of ATO records, for a special loan approval process by one of our lending private banks.

        This process aims to ensure that all Australians have maximised their borrowing capacity.

        Our algorithms suggest you might not be pulling your weight and Australia cannot afford the likes of you.

        Please attend the offices of the bank that appears below at 9.00 am tomorrow.

        Remember the ATO may decide to audit you for the next 20 years if you fail to comply.”

    • Even StevenMEMBER

      And why would our “independent” regulators resist such pressure? The government sets their funding. Does the employee refuse the employer?

  26. Mystic MedusaMEMBER

    I am legit surprised at this – I assumed that the corruption was in person.

    “EXCLUSIVE: Private certifiers are conducting building inspections using just photographs to avoid construction delays, The Daily Telegraph can reveal.

    And industry insiders say certifiers are being hassled by builders to bypass even “critical stage inspections” and grant compliance notices without assessing vital construction work in person.”

    • Welcome to the obvious end point of privatised certification. Why bother actually inspecting anything if you are going to pass it anyway, as you can then “inspect” many more properties for more $$$$$. And anyone who fails anything simply no longer gets any work and gets no $$$$$$$.

  27. In a way, Josh is throwing the banks under the bus.
    The banks are throwing the regulators under the bus
    The RBA is throwing the economy and the dollar under the bus
    The bus is getting a workout