Recession - Down under?
 

Copying the US and UK's behavior pattern, Oz media and government has totally ignored the upcoming economic downturn. Sometimes even tried to convince the public into thinking the opposite will continue to happen. I'm no expert, maybe it was best for Oz to be ignorant until its time was due, but now its there, knocking loudly on the door and since its already happened to US and UK, Oz does look a bit foolish for not vocally predicting it.

http://www.news.com.au/heraldsun/sto...015810,00.html
http://www.skynews.com.au/business/a...aspx?id=248833
http://www.abc.net.au/news/stories/2...ction=business
http://www.news.com.au/mercury/story...7-3462,00.html


So now the house price predictions have gone from "on the up" straight to "worst since great depression", the odds are Oz will suffer a fully blown recession. Anyone disagree?

Re: Recession - Down under?
 

The whole world is going to suffer a full blown recession. They happen every 30 odd years and we are well overdue.

No big deal though. Just need to save soap and darn socks for a few years like our parents used to :-)

Re: Recession - Down under?
 

And pick up bargains as others panic:D

Re: Recession - Down under?
 

Here's some more fuel for the fire from this mornings papers.
http://business.theage.com.au/more-b...0713-3ejk.html

Very glad we factored in up to 13% interest rates when we decided on the max loan for our house 3 years ago. approaching 10% doesn't seem so bad now as a result :-)

Re: Recession - Down under?
 

Does this mean that house-prices will go down? What about interest rates? We're about a year away from getting to Oz and I plan buy/build a house when we get there. Should I be depressed or upbeat about this imminent downturn?

- CDM

Re: Recession - Down under?
 

One viewpoint:

Property nearing once-in-100-year slump

For all those fleeing doom & gloom in the UK, the media here is all of a sudden laying on the same, really thick! If the Oz property market had been on a course maybe just to flatten, I think it is being well and truly talked out of that now.

I'd not be comfortable buying now. Of course long term, it will probably be fine, but I'd rather take a chance and buy later - I actually don't think there's any chance of price increases over the next 12 - 18 months.

Re: Recession - Down under?
 

Aus is the same as any other country, has up and down cycles, imagine most of the world now is in a down one rather than up. However OZ has some very different factors to USA and UK, and people should not assume exactly the same will happen in any two countries try to look at individual factors as well.

For the average bruce, petrol prices are killing aussies, food price hikes are maxed to the extreme by the total lack of competition in just about anything here. 2 companies own 74%+ of petrols cos and almost all supermarkets. Green policy will push the price of electricity and fuel well up and I dont think most aussies realise that.

Jobs are dropping notably in some industries like housing where the gov cliams there is a shortage of workers:sneaky: ( gov wants lower wages ) . If your asking about house prices totally depends what you are buying, first point bulding materials are rising at a staggering rate, even more than usual, as petrol rises, people want to live closer in to the already crammed cities, shortage of land in those areas already, million house shortfall, less than 1% vacancy on rentals and building starts well down so could suggest after a short fall there will be one hell of a building boom again.

Some areas of OZ have fell think perth was 5% , melb sales have dropped, bris well our bris house, worse house than ours just sold for $80,000 more than we paid late last year, but we dont buy mega mass build estate houses:eek: this was one off waterfront in an area that had massive improvements starting 2 mos after we bought it:D

Should you be upbeat or depressed. Depends its a very expensive place to live now, but if the doom and gloom of the aussie papers continues, punters will panic and there will be share/currency/house bargains to be had before the next up cycle, suppose it all depends if your a panic pants or someone who sees opportunity.

Re: Recession - Down under?
 

Wait till Rudd gets his ETS going and you can forget about a recession, there will be a Depression.

Re: Recession - Down under?
 

Wonder what his 'working families' :sneaky: will make of the costs this will bring :eek:

Re: Recession - Down under?
 

Will there be a recession here? Who knows. If there is a recession, will it be mild or severe? I don't think there will be a recession, but what do I know? Unlike some on here, I don't claim to 'know' what's going to happen. Most 'experts' talk out of their arses.
Here is why I don't think there will be a recession in Australia:
I'm usually against high taxes and big surpluses - like we have in Australia at the moment. Right now though, this is exactly what Australia needs. The government can cut taxes to provide stimulus and they can also undertake porkbarrel projects - infrastructure for example - to keep industry active. UK has no surplus so this option is not available to them.
Resources. Often talked about but they are a reality. Many projects now coming on stream, providing massive, extra royalties to both the Feds and WA and Qld. Ongoing and new projects will keep industry active. Resources will provide major 'insulation' against recession.

That's my opinion but who knows?

Re: Recession - Down under?
 

Rudd & Swan were caught with there dacks down fighting inflation tooth
and nail ,when along came the credit crunch and put a spanner in the
works .The figures are all over the place due to a credit crunch
and a resources boom which are misleading the job figures. I think the
I M F should audit the rudd Governments books there hot boiled
come back John Howard all is forgiven.


NZ Is in Recession and see no shame in it and dont bend the
figures.:thumbdown:

PS news .com.au Run hot and cold what a load of rubbish

Re: Recession - Down under?
 

Also KRudd and Co are not telling us how much their, waste of time, ETS is going to cost the average 'working' family. It was all well and good for them to spout off about 'saving the environment' to get elected. Signing Kyoto was easy peasy. Now the reality - it's gonna hurt.

Re: Recession - Down under?
 

I second that Rudd is a bull sh---r hes got the job now all he needs is
to trash the country:thumbdown:

Re: Recession - Down under?
 

He doesn't spend any time here to trash the country though. He has spent nearly all his time since the election visiting foreign places with his entourage. He is like acting like Gordon Brown who was going to save Africa with UK taxpayers money. Rudd is going to save the world from Global Warming, as if 20 million Australians will make any dent when China is commissioning a coal fired power station every week. The guy has shit for brains.

Re: Recession - Down under?
 

I doubt ANYONE could do the damage to Australia that the Howard years have done. Thank god!

Re: Recession - Down under?
 

Just wait and see.

Re: Recession - Down under?
 

I think the economic prudence of the Howard years is what is placing Australia in a good position to ameliorate the effects of any potential recession.

As a previous posted suggested, the fact that there is a massive surplus means that the government have much more latitude to act to stimulate growth than in the US/UK - tax cuts or reduction in fuel levies for example.

This also gives the government money to invest in infrastructure projects, generating growth as they go.

Another thing that makes Australia different is the compulsory Superannuation scheme. As a result of that, there is an awful lot of money out there that has to be invested into something.


S

Re: Recession - Down under?
 

There's recession and recession (AKA Depression).

You can darn your way out of a recession but a fullblown depression - which is a not unlikely scenario - is a bit different.

3000 US banks went under during the great depression: depositors lost their savings. Employment disappeared. Today most of us have pension funds invested in industry: they might go under. Rocketing fuel prices and unavailability could mean food electricity and commodity shortages within days. So don't think it's someone else's problem

Have a nice day <g>.

Re: Recession - Down under?
 

"Key US mortgage lender collapses

IndyMac Bank branch office in Burbank, california (file photo)
IndyMac is the fifth US bank to fail so far this year

One of the largest US mortgage lenders, the California-based IndyMac Bank, has collapsed amid a growing credit crisis.

Federal regulators seized the bank's assets, fearing it might not be able to meet withdrawals by depositors.

It is the second-largest financial institution to fail in US history, regulators say."

http://news.bbc.co.uk/2/hi/business/7503109.stm

Erm... you were saying... :blink:

Re: Recession - Down under?
 

Trust me, in the coming recession/depression, the modest home/single car, darning and soap saving family will manage a helluva lot better than the non sustainable credit dependent spenders. I know what category our household falls into, and as a result, I sleep pretty well at night ;-)

Re: Recession - Down under?
 

I too have no debt and no mortgage.

But in a full-on depression the normal is turned upside-down. Those with savings can lose them - no fault of their own - and those with heavy debt can, if there are enough of them (as in oz) get away with it. They can end up with their debts effectively washed out either because there are too many for a government to allow collection, or through rapid inflation.

Your prudent pension funds can disappear without any input from you.

I'm not saying that the sky is going to fall in tomorrow - but it's a consideration, and the events and practices of the past decades certainly haven't made it less likely.

Re: Recession - Down under?
 

Australia has a few advantages compared to the US and Britain. Unlike those two, Australia has no public debt and a strong budget surplus. If the local economy hits the rocks, the federal government has a lot of scope to cushion the blow through higher government spending and/or tax cuts. For the time being, the economy remains strong due to surging demand from China and other emerging countries. The biggest risk to our economy is an over-inflated property market. Hopefully this will deflate in an orderly manner - i.e. 5% drops in each of the next 2-3 years. This is a best case scenario and, frankly, we'd be damn lucky for it to be that gentle. A major slump in property prices is more likely. Another string to our bow is that our Reserve Bank has been fighting inflation hard for a while now while the US and Britain have been slashing interest rates and are now facing facing a serious inflation problem of their own.

Although the world is facing a scary future, US and British economic managers would kill to be able to swap their problems with those of their Australian counterparts.

Re: Recession - Down under?
 

I never said I was mortgage free ;-)

My point was not as to how clever someone may or may not be with their investments (as I agree with you, in a depression, that all goes out the window). My point was that people with a certain mentality can survive a depression much easier than others.

I would put it that in this day an age, more and more people are less and less able to cope with minor downturns in the economy, let alone a global depression !

Re: Recession - Down under?
 

I would agree with you there.