Bill Evans on property and interest rates
We received great insights Friday from Bill Evans, Chief Economist Westpac. (I attended the Ray White/Loan Market Economic Forum in the City with my team).
Here's my top 10 takeouts;
1. Sydney property market next year likely to be flat AT BEST
2. US, Canada, UK (pending) raising rates but that doesn't have a prime bearing on us.
3. Aust GDP growth is the key figure to watch - 3% or 3.5% means rate rises, lower means no change.
4. Bill doesn't believe there is the drivers to cause this, so he predicts no change to interest rates (cash rate) for the next 3 years.
5. He admits he is out of step with other economists and the RBA who all predict 1 or 2 rate rises next year
6. Next election current betting is $1.40 labour and $2.60 coalition.
7. Manufacturing, mining, construction overall still strong - oversupply of highrise apartments (less of a problem in Sydney)
8. Retail sales dropped in both Jul and Aug - people are feeling the pinch - households are at record high in % of debt compared to household income.
9. Huge drop in foreign investors (lending rules, government regulation). FIRB approvals down from @40,000 in FY15/16 and predicted 15,000 in FY17
10. Election years (2018) always lead to financial uncertainty
thanks Bill, great session