Business Insider Australia’s inaugural Devils & Details live podcast event was held last night.
Accompanying editor-in-chief Paul Colgan and markets and economics editor David Scutt was a stellar line-up of some of Australia’s most forthright and insightful commentators and analysts, discussing investment, property, and the outlook for 2019.
Here’s who joined Business Insider as panellists:
- Joanne Masters — Senior Economist at ANZ
- James Whelan — Investment Manager at VFS Group
- Laura Fitzsimmons — Executive Director of macro sales at JP Morgan
- Cameron Kusher — Senior Researcher at CoreLogic
- Pete Wargent — Co-founder of Allen Wargent Property Advisory
- Eleanor Creagh — Markets Strategist at Saxo Capital Markets
- Stephen Koukoulas — Managing Director at Market Economics
- Con Michalakis — CIO at Statewide
- Adam Smith — COO at OFX
- Bill Evans — Chief Economist at Westpac
As you’d expect from around 90 minutes of live panel discussion, there were a lot of interesting insights on the key talking points in domestic and international markets.
For those who weren’t there — or were and want a refresher — we’ve compiled a list of standout quotes.
Housing market forecasts, investment strategies, central bank policies and some of the more colourful comments on the night — it’s all here below.
“House price falls so far this month, values are down 0.7%. If that holds it’ll be the largest monthly fall in the index since December 2008.” — Kusher
“It’s a great time to buy a house. If you can scrape together a deposit, you’re in heaven.” — Koukoulas
“I’ve been observing real estate a long time, I’ve never seen anything like some of the forensic analysis of mortgage applications now, particularly household expenses. A lot of nervous operators are in the midst of a royal commission. The final report is due in February — what happens after that, who knows?” — Wargent
“As the market weakens people are less prepared to tell us if the auction was successful. Historically, our collection rates have been about 90% of the market, now it’s slipping down to the low 80’s”. -– Kusher
“There’s no standard on property data – ultimately that’s the big challenge for the housing market, there’s no one standard format for this information.” — Kusher
“If you’ve got a 10-year plus horizon on the house you want to live in, just buy the bloody thing. You can paint the walls purple and buy a cat. If it goes up or down you’re not going to sell it because it’s your house,” — Koukoulas
“We expect the time taken to save for a house deposit will fall by around 30%, but it’s still at nine years. It’s still incredibly tough for first home buyers to get into the market.”
“If you ask the young ones in this audience, maybe they like falling property prices. Maybe the market clears and they can get in.” — Michalakis
“One of the dubious advantages of being British or Irish is we’ve lived through credit crunches in real time. At this point in time, it’s nothing like that. A lot of people in real estate will tell you they’ve got clients desperate to invest, it’s just the banks won’t lend to them.” — Wargent
“Watch what happens in our labour force because if that starts to turn the other way, it’ll be bad news for the Australian housing market.” — Kusher
“Softer housing activity could be one of the ‘red shoots’ for economic weakness in the US. I think people are going to start to pay attention to this.” — Whelan
“We look at the credit impulse — flow of new credit as percentage of GDP – as very pertinent in determining economic turning points. The flow of new credit could be a positive for China, but we have a negative view of the UK, where the credit impulse is contracting.” — Creagh
“The base case with our updated house price forecast is that the consumer can weather the storm, because the labour market is so strong.” — Masters
“There are warning signs, but at the same time once something becomes talked about too much, it stops becoming a thing.” — Whelan
“We think global growth will slow, but the US economy will be the exception through the start of next year.” — Fitzsimmons
“If we’re talking markets, the thing we’re looking at is the timing of when the Fed goes on hold. That’s all that counts.” — Evans
“They (the Fed) are focused on the US labour market, and I think the labour market still has a lot of momentum. I don’t think the Fed goes on hold until they see employment growth slow to around 1%. That’ll determine the turning point in bond and currency markets.” — Evans
“The RBA is like the juggler on Pitt Street with 10 pins, he drops one and starts again. The RBA has an inflation target, they keep missing it, and everyone just says try again.” — Koukoulas
“If markets have fallen 10%, whether property or equities, and we need a rate cut with record household debt, then this country’s really stuffed.” — Michalakis
“My rate-cut call is tied to the negative wealth effect from falling house prices. Research on the link between household wealth and change in consumption growth suggests falling wealth is correlated with neutral or lower consumption growth.” — Koukoulas
“We had thought by now, we’d see the falls in house prices start to moderate and we’re just not seeing that. We don’t see the RBA hiking rates while house prices are falling.”
“We’re going into a world that is going to be rockier, but over-trading in this environment is going to lose you a lot of money.” — Michalakis
“Think longer term – find interesting long-term quality investments – don’t try to time this. I think a lot of people are going to get splinters and going to cut themselves.” — Michalakis
“I think we’re heading into a very ordinary situation in 2019. Even if you are bearish, it is hard to take a big position on a bearish view – the idea is survival for now, waiting and being patient — we’ve got a lot of cash in the portfolio.” — Whelan
“We’re looking at value as opposed to growth, reassess expectations and stop going for FAANG returns – you’re not going to get FAANG returns next year.” — Michalakis
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