"When's that rate cut?" Mark Bouris & Stephen Koukoulas Monthly Update 

Well, Brisbane house prices rose quite slowly up until late 2019 (2010-2019). Rates were in fact becoming quite low, with the RBA cash rate at 1.5% in 2018. It actually dropped to 0.75% in October 2019. With rates at 4.35%, prices are now 70% higher than 2018 prices, and Brisbane rose 16.1% just over the last year to the end of May. Rather mental.

Developers borrow money to funds their builds (interest rates are part of their costs, they pass on)... so if the net outcome is more incentive to supply and demand (migration) moderates... house price growth would moderate or fall in some locations.

"Economists will be death of capitalism". Heard this today and it made me think of Kouk.

Man you are thick! Hear? Here? Also, what first responder said. We will have a screwed economy that’s why they will lower rates. So dumb. I guess your over leveraged in property? 🤡

@@InfinityIsland2203 Pretty sure housing supply (and thus affordability) was on the decline for a decade prior to the Labor government. Also current migration is at catch up levels, so a long run average doesn't account for that much of the supply crunch... You even had Dom Perrottet publicly call for increased migration. This is a broad and longstanding failure of public policy, not just migration. As for renting and rates: Historically in the private market, increased rates haven't flowed through from rates as a 1:1, often because of the role of negative gearing providing a buffer/incentive to keep rents stable. This has allowed the RBA to be comfortable with housing having some baked inflation from it's cash rate increases (maybe not anymore?). However, decreased housing ratios (people/house) account for much of the short fall, not just migration; this has allowed investors and landlord to pass these costs on much more. I'd be interested in the change of ratio in cash positive territory as opposed to negatively geared. Ultimately this won't be fixed without major reform and many toes being tread on. It'll take bravery and maturity from all in Australia to see housing for what it is... a right not a privilege. A place to live, not a wealth pathway. Where you have the value of the housing pool worth many times more than the share market we continue to misuse capital reducing our innovation and relying on governments to fund structural reform and funding the large transitions. Think about if we redeployed the money in housing investment into innovation investment...

Everything is a distraction from the mass money printing QE undermining and destroying the currency's credibility

I keep talking about this. I was so excited to read your comment. No one mentions this. You're spot on. Print lots of money. Oh no inflation... who would have thought

​@AB-sv5rf It has created the largest asset bubble in history, and what happens to a bubble?

Higher interest rates do shrink the money supply…..

@@brendand9721 Agree, however I think a lot of the Covid cash has flowed into the wealthier portion of the economy and its gone to purchase assets. Given productiivity hasn't been great in the last 20 years (or more) new asset creation is decreasing so the pool of cash still washing around the economy is being used to buy the existing assets pushing up asset prices. I reckon we will end up with a decrease in services and product inflation but asset inflation may continue for some time after that... while inflation may decrease prices won't so it could be a long while for a "catch-up" in asset prices (broadly speaking).... interesting times!

Because if there was debt against milk, higher milk prices would be “growth”

Because housing is generally considered to be an asset?

@@fragglerock5696 not for those in their final year of high school who will have to pay for the untaxed capital gains with their future post tax incomes leveraged up

​@andrewbroome7404 yep well that's how it's always been so nothing new there.. plus capital gains are taxed but obviously only when you sell

​@@andrewbroome7404 Ok no CGT on your main place of residence.. i thought you guys did have one ( I'm in Kiwiland :) )

Gotta keep the property ponzi going.

Not if their mortgage goes up by 1k every hike

Well said . Same here 50 years old, some assets. I am working twenty hours a week, studying and have completely cut back. Still live fine and travel to Asia two to three times a year. I will never play there game again and will retire out of Australia

What industry?

@M.-.D capital equipment which covers a very wide broad industry. Seeing it and hearing it. Even bunnings are cutting back casual hours. Great times ahead 👌

@@Nurburg911 very interesting. Thanks for sharing.

Twice the length from one end to its middle. 🤘

Temporarily 😅😅😅

No it doesn't, if the RBA weren't so cowardly and raised interest rates high enough to actually have an impact, then house prices would come down whilst those who save get rewarded in their savings accounts.

​@@glassy2937 exactly

@@glassy2937 What about those who saved and just bought in recent years? They can get slaughtered to make you feel smart? People need to buy at some point if they want to have some stability in where they live.

Yeah I think if anything, another one rate rise is needed. CPI doesn't seem to measure the REAL rate of inflation.

​@@williamcrossan9333nor does it seem to reflect the 20% rise over the last few years and the lagging effect of that.

Yeah I'd believe you if it wasn't for the bottomless pit in the super pool that I'm becoming very very sure bank bosses are 😋 with....LRB is bottomless pit and we need a 🧱

It's what caused this mess.

Mark is a hypocrite. He regularly appears on morning shows and spreads the sentiment.

Yes. Rates need to go up.

No hike today

​@@yellowbrickroadtv I didn't say it would be today, but they'll go up before they go down. Talk then!!!

@@robm1415 Fair call, hehe. Thanks for being here.