The macroeconomics of Australian residential property investing

Before COVID-19 hit, Nucleus Wealth launched an Australian property calculator. The idea I wanted to illustrate is that house prices are very sensitive to interest rates. So, with interest rates so low, property was going to be stuck in purgatory:

  • if the economy improved and interest rates increased then higher interest rates would cap property prices,
  • if the economy didn’t improve, then weak growth and already low interest rates would see property prices fall

I’ve changed my mind. Desperate times call for desperate measures. I’m pretty sure mortgage interest rates are going lower. Much, much lower. 

A mistake in our property calculator

In our house price calculator, we had a minimum mortgage rate setting of 2%. It should have been much lower. We just changed it to 0.5%. 

Impossible? Japan has mortgage interest rates below that. So does Germany. Ditto France. And there is a decent probability the rest of the developed world is destined for the same. 

It is already happening

The mechanism is already set up in Australia. The Reserve Bank of Australia has begun providing three-year funding to banks at 0.25% for mortgages. Banks can probably use this money to go below 2% for three-year loans. And that is just the beginning. 

It started in April with an “initial” funding allowance for banks. Then an “additional” funding allowance. Now there is a “supplementary” one. 

There is clearly a risk of running out of adjectives to describe the bank funding. But there is no risk of running out of the desire to keep the property market ticking over with low interest rates and oodles of credit. The Treasurer’s announcement last week requesting banks to start lending irresponsibly confirmed that for anyone who still doubted.

Europe has already paved the way. The European Central Bank started with 0.1% funding for banks in 2014. By 2016 the rate was -0.4%. Now, -1.0%. Yes, the central bank will pay commercial banks up to 1% if they can just find someone (anyone!!!) who will just borrow the money.    

Wow – great news for bank investors, being paid to make loans!

Nope. It is the flat yield curve problem smashing bank profitability, I’ve posted about it several times. 

Don’t think of it as free money for banks. Think of it as life support so that the banking industry doesn’t collapse. 

European Banking performance

What does this do to residential property forecasting?

Keep in mind that I’m talking about forecasting residential property in aggregate – not individual houses or suburbs. 

There are significant links between property prices and the availability of debt. The financial crisis showed this internationally. The Royal Commission into banking showed this in Australia. When the amount of debt available rises, so do property values. When debt slows down, property values fall. 

The Federal Government is hellbent on forcing more debt onto borrowers. The Reserve Bank of Australia is providing the funding. Credit is available. 

I’m going to argue four other factors also constrain how high or low property prices can go. These are the four factors you can use to forecast property prices in our online calculator:

  1. Mortgage Payments to Rent: comparing the cost of a mortgage with the cost of renting the same house. By using this ratio to constrain house prices, we assume when the ratio gets high that people will prefer to rent rather than buy. 
  2. Mortgage Payments to Wages: assuming when the ratio gets high, people rent because they cannot afford to buy. 
  3. Property Prices to Wages: assuming when the ratio gets high, people rent because they cannot save enough money to afford a deposit. We treat this as less important than the above two ratios.
  4. Rental Yield: Rental yield is the annual rent divided by the property price. By using this ratio to forecast prices, you are assuming when the ratio gets low investors will not buy property as they are not getting a return that is high enough. 

Australia can be #1 in the household debt race

Strap yourself in for moral hazard. We already have the world’s 2nd highest consumer debt, about double most Eurozone countries. If interest rates can fall further and the shackles are off the banks for responsible lending, then who knows how much more indebted we can become?   

Investment Outlook

It is a fascinating showdown.

On the one hand, we have plummeting immigration, massive unemployment, eviction moratoriums to deal with, bankruptcies to deal with and a larger private debt burden that just about any other country.

On the other, we have a burning political desire to keep house prices high, pump more debt into the economy and a roadmap to much lower interest rates to help.

Property Investment Factors
As a reminder, in Perth from 2014 to 2018 we saw free credit (pushing prices higher) meet rising unemployment (pushing prices lower). Rising unemployment won:
Perth Housing Crash vs Sydney/Melbourne Boom
The best hope for housing bulls is that the interest rate falls come before the rent eviction moratoriums, interest repayment holidays and bankruptcies hit full stride. This might spark a mini-house price boom.
The worst outcome for housing bulls is that the interest rate falls don’t come until after house price falls gain too much momentum.
I think the negative outcomes are the default setting at this point, the burden is on the Reserve Bank and the government to do more. Either outcome is possible, but a negative outcome seems more likely.
Keep in mind that we have already locked ourselves into low interest rates for the next decade. If the government gets its wish for more household lending and lower interest rates, there may not be another interest rate increase for a generation. Or until a Modern Monetary Theory loving politician is elected.

Appendix: Australian property calculator valuation summary

The net effect (see individual city data below for more info) is:

  • The cost of a mortgage relative to the cost of rent is about average in Sydney and Melbourne. In Brisbane and Perth, the cost of a mortgage is cheap relative to the cost of rent. Both rents and mortgage costs are likely to continue to fall, but mortgage costs can fall further, improving affordability.
  • The cost of a mortgage relative to wages is about average in Sydney and Melbourne. It is cheap in other cities. The problem is two-fold: (a) wage growth is not going to be high (b) unemployment is high. A positive longer term sign for house prices, a negative shorter term sign. 
  • House price to wages are close to historical highs in every city except Perth.
  • Rental yields are close to historical lows in every city except Perth. Eviction moratoriums and rental declines are not helping investors. 

PS: I will be on the DFA livestream channel on the at 20:00 on 29 Sep 2020 to discuss these factors and more https://www.youtube.com/watch?v=GSTYE7WK92o

City valuation detail

Sydney

The chart on the left shows how each of the ratios used for forecasting in the property calculator have changed over 40 years. The histogram on the right shows the distribution of the same ratio over the 40 years.

Sydney Housing affordability
Sydney Housing affordability

Melbourne

The chart on the left shows how each of the ratios used for forecasting in the property calculator have changed over 40 years. The histogram on the right shows the distribution of the same ratio over the 40 years.

Melbourne Property affordability
Melbourne Property investment returns

Brisbane

The chart on the left shows how each of the ratios used for forecasting in the property calculator have changed over 40 years. The histogram on the right shows the distribution of the same ratio over the 40 years.

Brisbane Property affordability
Brisbane Property investment returns

Perth

The chart on the left shows how each of the ratios used for forecasting in the property calculator have changed over 40 years. The histogram on the right shows the distribution of the same ratio over the 40 years.

Perth Property affordability
Perth Property investment returns

 

Adelaide

The chart on the left shows how each of the ratios used for forecasting in the property calculator have changed over 40 years. The histogram on the right shows the distribution of the same ratio over the 40 years.

Adelaide Property investment returns

Macroeconomic factors: 

Inflation

Employment

Australian Real Wage Growth

Mortgage rates

Australian Mortgage Interest Rates over time

Sources:

Nucleus Wealth has compiled this data using a range of different sources.

For property prices and rents we use a Domain for more recent data quarterly data, cross checked with SQM and Rismark to fill any short term moves. For older data we use Australian Bureau of Statistics data to fill timeseries.

For economic data we use either Reserve Bank of Australia or Australia Bureau of Statistics data. For older data we have had to estimate some factors due to differing definitions over time.

More information on forecasting factors:

Mortgage cost to rent

This is a comparison of the cost of a mortgage with a 20% deposit, compared to the cost of renting the same house. By using this ratio to constrain house prices, we assume when the ratio gets high that people will prefer to rent rather than buy.

The consequence will be either (1) property prices will fall until it becomes more attractive for people to buy or (2) the Reserve Bank will lower interest rates and so the cost of a mortgage will decrease.

The benefit of using this ratio is it provides insight into the decisions both homeowners and investors are making. When the cost of a mortgage is cheaper than renting for a homeowner, or an investor can see their mortgage paid for by the rent, then prices tend up. Also, rent is a relatively stable series:

i.e. rents tend to go up a little more or a little less than inflation

The problem with using this series is that you can get significant changes in the series as central banks raise interest rates to slow the economy and then cut them to stimulate. It also ignores wage growth – strong wage growth supports higher prices. It ignores the higher deposits needed with higher house prices.

Mortgage cost to wages

By using this ratio to constrain prices, you are assuming when the ratio gets high, people rent because they cannot afford to buy. The consequence will be either (1) property prices will fall until it becomes affordable for people to purchase or (2) wages will rise until it becomes affordable for people to buy.

The benefit of using this ratio is that it provides a realistic impression of the decision many homeowners make: they spend as much as they can afford. Also, wages are even more stable than rents:

i.e. wages tend to go up a little more than inflation each year without much variation.

The problem with using this series is the same as the above: you can get significant changes in the series as central banks raise interest rates to slow the economy and then cut them to stimulate.

Property Price to wages

By using this ratio to forecast prices, you are assuming when the ratio gets high people rent because they cannot save enough money to afford a deposit. The consequence will be either (1) property prices will fall until it becomes more affordable for people to buy or (2) wages will rise until it becomes affordable for people to buy.

The benefit of using this ratio is that it provides an additional dimension to the 2nd factor. Homeowners spend as much as they can afford, but they need to be able to save the deposit. This helps to indicate whether they can.

The problem with using this series is that it doesn’t incorporate falling interest rates or changes in rent. For this reason, I tend not to use this as my primary forecasting method, more of an additional check on the outcomes.

Rental Yield

Rental yield is the annual rent divided by the property price. By using this ratio to forecast prices, you are assuming when the ratio gets low investors will not buy property as they are not getting a return that is high enough. The consequence will be either (1) house prices will fall until it becomes more attractive for investors to buy or (2) rents will rise until it becomes attractive for investors to buy.

The benefit of using this ratio is that it provides a better indication of investor returns.

The problem with using this series is that it is hard to forecast. There is (probably?) a limit to how low yields can go, especially as there are only a few more rate cuts left. I would argue that the net (i.e. after subtracting costs) yield is a better indicator, but this is much harder to observe and requires guesswork. Another alternative would be the yield relative to something like a ten-year government bond. This would show the return for investors relative to other opportunities. However, if you wanted to forecast property prices that way, your first step would need to be to predict the 10-year bond rate, which is making forecasting harder rather than easier. For these reasons, I tend not to use this as my main forecasting method, more of a supplementary check on the outcomes.


Damien Klassen is Head of Investments at the Macrobusiness Fund, which is powered by Nucleus Wealth.

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Damien Klassen is an authorised representative of Nucleus Wealth Management, a Corporate Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796.

Follow me
Latest posts by Damien Klassen (see all)

Comments

  1. Low vacancy rates and property price pressures in Perth are likely due to the combination of closed WA borders and an extension to the eviction moratorium put in place by the WA government. The extension to prevent evictions for non payment of rent has been railed against by REIWA but from memory is in force till next year. then you add in the requirement of the WA resources sector only being able to hire workers that live in WA because of the closed border, and you have former FIFO works and perhaps families moving to WA. Then you have others just moving to WA because its been covid free for so long and because it has closed borders.

    But what happens in 6 months, if the whole of Australia has eliminated covid transmission locally, the WA borders could be open to FIFO workers to fly in and out, the eviction moratorium is over you can probably expect a lot of people are going to be turfed out by the owners, and job keeper starts to become a distant memory. assuming all states are covid free those that moved to WA may move elsewhere. the property price pressures in Perth wont be quite like they are now.

    • Diogenes the CynicMEMBER

      +1 Agreed. Stock has fallen but there is a ton of cheap, low quality rubbish being constructed on the fringes. Perth might get a 10% bump but then slide as all the Fed support is wound back.

    • Strange EconomicsMEMBER

      And all the high income FIFO workers now moved to Perth paying high perth rents – an influence on the smaller Perth market (but paying less than their melbourne rent before). Mind you thats less FIFO renters in the eastern states, but wont’ effect much as they don’t compare to the number of high income bank types in the east. .

      • A bundle of them will move back east once the borders open, and have no trouble breaking the lease because it will be easy enough to find another tenant. Some will stay in WA though and I have no idea what the split will be.

    • Strange EconomicsMEMBER

      Good article on the forces up and the forces down…So its now a footy match to watch – Credit forces up have done 20% a year before, but unemployment etc down – minus 20%… N
      Net result -5 % to -10% ?…
      Nothing when property is 50% overpriced on any of the fundamentals of rent, wages, etc.

      The property govt saves the day – (and itself)
      ie when there are 11 million owners and 100K FHBs (half with parent support), where do the votes lie?

  2. If you want house price growth, then set a maximum of 10% of migrants from any one country, and a maximum of 49% male migrants from any one of those countries. Set a maximum age of 45 and require wannabe citizens to have paid a minimum of $100,000 in income tax ($200,000 as a couple) before they can apply for citizenship.

      • The USA sets a maximum of 10% migrants from any one country on most types of visas.

        It forces them to integrate rather than form ethnic enclaves.

    • Price supports goneMEMBER

      That was pretty much the previous model – based on mainly Chinese with a million at the high end, now discouraged by the Chinese goverrnment, and Indian migrants in Melbourne with lower incomes. So both these price supports are gone for the market.

  3. A very reasonable, well thought out article.
    But it has one big flaw – it relies on logic, sense and sound, fundamental thinking.
    That’s not how the property market in our, or other Developed Nation countries works…..
    The fact we are chaining our current citizens to a lifetime of debt in a way that previous ones were spared, and then ‘asking’ our children to buy those same chains from us at an even more inflated price shows us the depths to which our societal fear has plunged.

    • Great observation!
      These loans are now designed to never be paid off-the absolute mission of previous generations where the cost of borrowing money provided a reasonable return; a paid for dwelling.
      We’ve left that far behind and everyone is crowding a speculative ( hope the vals rise or we’re wrecked) approach all to save the skin of the lenders.
      From a ‘people’ standpoint, this is a terrible mistake and we’ll see it crumble in spectacular fashion. Until then, people will ‘sign up’ contentedly to ‘lease’ a debt in the hope that there will be others willing to take it over and the promised cap gain can be extracted.
      Straya. Here sir, the bankers rule!

    • There will be a few million BBs dead in the next 10 years in Australia, it’s happening around the globe. Should be interesting as kids sell the houses and divvy up the loot. Die BOOMER Die✊🏿

  4. Totes BeWokeMEMBER

    Having risen 20% since March, if prices halved in good suburbs of Newcastle and Wollongong, they’d be insanely expensive.

    This thing has gotten so crazy, it’s hard to look at it as even real.

    Buyers are looking to the repayments they can afford assuming the property value will keep rising. I’ve never seen anything like what I’m seeing right now.

    • I must confess I had pointed out to me this week that house prices in suburban Geelong have actually risen sharply since the start of the year (it was a RE agent who pointed this out but the house for sale down my street seems to bear out what he was saying). I find myself wondering what on earth is going on.

      • Totes BeWokeMEMBER

        Yep. I can’t work it out. If properties were selling like hot cakes in the cities i could understand it. People thinking they’ll never have to routinely travel to work again, making Geelong, Newcastle, Wollongong, etc attractive along with relatively big bags of money from having sold in the city.

        • Same in my small rural town, prices rocketing up so fast that the local RE agents won’t even put prices on the properties anymore, in case they inadvertently underprice them.

          I think it’s all going to collapse when C19 fades and suddenly being near work becomes important again as bosses phase out telecommuting.

        • Strange EconomicsMEMBER

          Recency bias supports the regional buying. After 6 months people assume something is permanent they will be work from home forever so move to regional areas.

        • Now you guys are seeing what I’ve been seeing. This exact same phenomenon has been happening in Albury-Wodonga. People are out of work, 1 in 5 shops are shuttered up along the main street. Yet house prices are at peak prices and there’s a feeling that people are rushing to buy. Meanwhile everything points to economic doom and gloom.

          I’ve given this a lot of though and I’m putting it down to the JK and early super access sugar hit. The fact of the matter is that your average joe doesn’t pay any attention to economics like people here do. All they see is $ in the bank account every fortnight and no foresight 3-6months into the future. There’s a sense of entitlement in the broader community that the government owes them a handout and they’ll never be allowed to go dirt poor or lose their house.

          JK/JS has started to be wound back. There’s a lot of people that aren’t going back to work anytime soon. What of all those pilots, hosties, customer service, car rental folk, hotel staff etc? Some of them would have mega mortgages that need paying back but you wouldn’t think it atm

      • TailorTrashMEMBER

        All this low cost “printed “money is causing inflation …it’s just that the inflation is being funneled into houses to create the illusion that the punters are wealthy .

        Just like we need to find carbon sinks to soak up all that
        bad stuff we create through rampant consumption so we need to find an inflation sink to soak up all that debt .
        Banks make money the punters ( who own a crumbling house ) get rich. It’s a thing of beauty

    • I’m just south of Wollongong and the market is flying. With a work relocation on the cards we are mulling over whether we sell our place- the prices we are seeing in our neighbourhood for comparable properties are nuts. Friends down the street sold in 4hrs of listing going live for more than asking.

        • Not sure I can put a percent on it, but even the crap is flying- old daggy stuff thats languished for ages on the market getting cleared out, suburb record near the new Shell Cove marina site, Kiama/Gerringong a little further south really pumping. It ‘feels’ like the hot 14/15 market, very bizarre. These have always been very expensive little enclaves though… I am seeing more stock coming on market so i dont know if it will burn itself out and find some equilibrium?

    • On the bright side, if mortgage rates went to zero % at least that would spell the end of Interest-only 😉

      All repayments would be capital only … but we are definitely approaching the end. Lunacy like this is not sustainable and using Japan as an example is not valid either.

      • Totes BeWokeMEMBER

        We have to be reaching the end. Who in their right mind takes on $2m debt with the mystery of how EVERYTHING going on unfolds?

        I have literally never seen more reckless behaviour in my life.

        The way I look at it is the upside is not hugely life changing, while the downside is a catastrophe. I’m an unusually content kind of guy though.

        • A very good point. For me, the future is a big grey cloud with very few certainties. Everything from how Covid will pan out (vaccine, more outbreaks etc) through the US election to the US-China trade war (or hot war) is in play. Taking on a huge debt at this time to buy a house in suburban Australia seems insane to me.

          Beyond that, the economy is so distorted it looks more like a giant swollen, purulent, pulsating tumour than anything else….it’s distorted beyond belief. When the treasurer is openly encouraging actual irresponsible lending by banks under circumstances where many people are reliant on gummint funding via JobKeeper to stay afloat…well…the crazy times are here.

          • Exactly my thoughts. There are some very serious grey swan events which may yet come.

            I look at the fall out from this shock broadly across the world and I just see trouble brewing. Turkey/Greece, Azerbaijan/Armenia, Ukraine still bubbling, Belarus, Iran, pakistan/Afghanistan, India/China, South China sea, Taiwan, Syria, South America basket case currencies. Then internal political strife and hang over issues from GFC in US, Germany has issues, yellow vests still going.

            Instability everywhere you look. How can you move with any certainty? Weapons manufacturers a buy?

        • Most of us here are in that mould. If we weren’t, we’d balls deep in property and debt and hanging out on property bull websites for validation.

      • Or alternatively interest only loans stay and you pay nothing to service the loan. Banks then calculate the max amount you can borrow as infinity and prices go to infinity. Problem solved.

        • minimal bank earnings with negative interest rates and no repayment of capital will do wonders for their share price

    • Do they? I look at repayments according to my serviceability and risk (ie I use interest rates of 7%+) plus having spare cash.

      I do look at downside risk – this is PPOR/P&I/OO – ie 20% drop as well, but I don’t really look at future price growth – this is utility roof over heads family home/home business stuff. Don’t think I am Robinson Crusoe there.

      **not trying to argue/pick a fight with you. I feel most comments need this disclaimer these days.

      • Totes BeWokeMEMBER

        7% would wipe the whole lot of these people out i would guess.

        They have dual 4wds out the front, renovations as soon as they move in, lips and botox. Its disgusting. Everyone’s a wanna be Cardashian now.

        If i hear one more mother order “Alistair” a baby chino, I’ll fking scream.

        I hope it falls in a screaming heap and they have to sell themselves and beg to feed their kids.

        Beg from whom is the tragic question. China?

    • innocent bystanderMEMBER

      plenty of places around the country like that.
      I was posting on here weeks back similar price hikes here in parts of fringe Perth.
      low credit costs and WFH.

  5. Thanks Damien – thoughtful piece.

    My only reservation is that you take low inflation as a given. The risks here are that inflation becomes a problem in 2021 (my base case) and then the RBA face a real conundrum as anyone who has taken on a large mortgage in the past 2 or 3 yrs might be in trouble if rates rise. That for me is the (non) Black Swan out there.

    • Listened to a podcast with a guy called Jay Sivapalan the other day, sounded like a smart guy, he also saw a good probability of inflation.
      RBA will be between a rock and a hard place then, Unfortunately i am not really convinced they would do the right thing and raise rates when faced with surging inflation.

        • The argument will be that inflation was low for so long that we must accept a period of high inflation so that overall it averages out to ~2%. You wait and see. 😶

          • That’s precisely what the Fed has said they’ll do. From Jerome’s own mouth a couple of months back.

        • Or inflation statistics manipulated even further by the ABS , “look theres no inflation in iphones so there s no inflation ”
          I wonder how that would work out for inflation protected bonds ?

          • Yep, they’re indexed to the fake inflation indicator so it is an issue. But even the fake one will have to rise eventually.

    • The curtailing of globalisation, which is occurring, must put pressure on inflation notwithstanding lack of demand.

      • Agreed. Throw in a massive increase in money supply, less efficient supply chains (to your point) and technology not delivering productivity improvements at the rate it was in recent years.

    • darklydrawlMEMBER

      History is full of examples of what happens to a society when you inject to much money into it. I maybe incorrect, but it seems to me like fiat money is becoming worthless and we’re awash in the stuff. That is partly why house prices can and will keep rising – it is more like monopoly money now, than an IOU store of value. That’s why folks in Oz look at some sh!tty RE 30 kms away from anything priced at $1.8 million and think it’s a deal. You can also deduce this by the interest rate (a measure of risk). If the risk is rated near zero the product is either flawless or worthless. You choose.

      It seems to me that hyper inflation is a possibility. It’s almost tempting to move significant chunks of cash outside of the monetary system entirely (crypto, gold? I dunno).

      • Couldn’t said it better myself.
        I personally have exposure to a home (with a modest mortgage), a fair amount of precious metals exposure via various means (stocks, ETFs, phyz etc), but also base metals (copper, zinc, nickel) and some inflation-linked bonds. I feel pretty comfortable TBH. I’m tempted to get some crypto onboard for diversity and it may turn out to be a very good currency in a crisis.

  6. “In our house price calculator, we had a minimum mortgage rate setting of 2%. It should have been much lower. We just changed it to 0.5%.”

    While I agree with the view put forward by yourself and mentioned recently on MB that there is a non-zero chance of rates going lower – in terms of the calculation the minimum assessment rate set by APRA should be used.

    If we go for a loan with an advertised rate of 2%, we need to be able to service the loan at least at 4.5% (2% + the 2.5% min buffer set by APRA). https://www.apra.gov.au/news-and-publications/apra-finalises-amendments-to-guidance-on-residential-mortgage-lending

    Even if rates go to zero then the assessment rate for borrowers would be 2.5%.

    imo I think it’s criminal they’ve allowed the assessment rate to drop below 7%. 30% of a workers net wage is the limit for affordable housing & it should be 30% of net wage assessed at least at 7% over 30 years max.

  7. I keep coming back to the artificial bubble we are in. Remove the virus today and big structural problems still exist. 23% unemployed, crushed consumption, govt stimulus declining, rent deferrals, eviction moratoriums and loan timeouts. If you have the money and a secure job then sure but if you are an edge case (half the country) it seems like a bloody big bet.

  8. Excellent post.

    Which only makes even more clearly the point that if you don’t like insane public policy arising from the current monetary model then you need to change it.

    And the first step is thinking about it.

    Why should private banks have a monopoly on operating deposit accounts at the RBA?

    Once you agree they should not then the rest is quite straight forward as removing that monopoly is the start of the process of unwinding an economy built on debt and asset price speculation.

    https://theglass-pyramid.com/2020/08/15/myrba-the-quick-guide-and-helpful-links/

    • By now nearly everyone commenting on MB must have read about your myRBA proposal. Do you have to shoe horn it into every post?

      As I’ve said before – this idea needs to be tweaked and turned into a fintech – if it makes sense for a private company to do this then it could happen. The govt never will.

      • Anon,

        I only include it in posts where it is relevant. The reason I draw connections between a range of post topics and aspects of the MyRBA proposal is to make the point that the current approach to our public monetary system is driving much of the dysfunction that MB notes day in day out.

        Fintech? Apart from being an attractive buzz word what are you talking about?

        That you seem to think Fintech has anything to do what I am talking about is revealing.

        Do you think that the private banks should have a monopoly on deposit accounts at the RBA?

        Are you arguing that “Fintech” firms should be allowed to operate deposit accounts at the RBA?

  9. Totes BeWokeMEMBER

    Regional towns up 20%…..”Premier wants workers to return to Sydney’s CBDs to support businesses that “have essentially been inactive for seven to eight months”….

    Big business will require workers to return to the office. It’ll be a reciprocal deal between Big business, other business and government. I have zero doubt.

    WFH does not fit capitalism, nor an LNP state and federal government.

    • innocent bystanderMEMBER

      WFH fits capitalism in so much as corporates can reduce the costs of their corporate offices.
      they have had 6 months and more to see WFH can work for a lot of them.
      talking to some bigger corporates WFH is baked in

  10. The calculus is so simple. There is no shortage of wannabe mortgagees and there is no shortage of money. There is only a shortage of creditworthy borrowers. Increase the flow of creditworthy borrowers and you increase the flow of mortgages. That’s what all of these policies are about…loose lending laws, lower rates, LMI underwriting, FHB grants, HomeBuilder, super early access…they de-risk the banks and expand the pool of creditworthy borrowers