We always love the work of Freelance CEO Matt Barrie not least because he often uses MB charts:
Australia’s property market enjoyed a golden run for years on end — but according to one Aussie CEO, those days are now gone for good.
He said the combination of our weakened housing market coupled with global market trends meant we were entering a “new realm” of economic misery.
And he believes the impact could be even worse than the effect of the global financial crisis, which brought certain countries such as Spain and Ireland to their knees.
“The banking royal commission has been the catalyst that pulled the rug out of residential mortgages,” Mr Barrie said.
“Now applications are being knocked back tenfold, banks are becoming withdrawn and the easy credit that was available is gone.
“I don’t think lending will ever go back the way it was before, and it will change the housing landscape quite dramatically.”
He said a crackdown on Chinese buyers had also affected the housing market, and China’s trade war with the US was also affecting the economy.
…He said wage growth and construction were both “anaemic” in Australia at the moment, and the property market had gone into “free fall” as a result.
“We’re in crisis mode. Whoever wins the federal election will inherit an economy that is not in good shape at all.”
Mr Barrie said the looming crisis heading for Australia “may even be worse” than the impact of the GFC on other nations due to our burst housing bubble, scrutiny on the banks and the extreme simplicity of our economy.
“In the last decade our economy has basically been (based on) shipping iron ore and coal, building houses and bringing people in (from overseas) to buy those houses, and that’s it,” he said, noting our economic diversity was worse than developing countries such as Oman and Vietnam.
He said the key to turning things around was building up new and developing industries such as the technology industry and making innovation a national priority.
You can’t really argue with that.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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