Gottiboff: RBA to hike on virus shock

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Perhaps freshly off the blower with Highrise Harry, Gottiboff explores some COVID-19 scenarios today. If it is stopped he says:

…On the weekend I was yarning with a Hong Kong resident who has temporality switched his base to Australia. He tells me the coronavirus is far more destabilising than the riots and a great many Hong Kong people are now dusting off their exit plans. Expect greater migration pressure from both Hong Kong and China once the crisis is over.

That will create a higher dwelling demand at a time when the market is already booming. First home buyers are back. We are looking at a severe shortage of dwellings in many areas, and that balloons prices. The looming housing shortage was created by the credit squeeze which triggered a severe drop in building. So now the higher demand threatens to explode the market because of the supply shortage.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. 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.