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Sydney NSW has fastest-growing economy in Australia. Low rates doing what they're supposed to.; Low interest rates and falling iron ore prices create increasingly favourable conditions for the eastern states
Topic Started: 20 Jul 2015, 09:41 AM (5,733 Views)
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NSW, Victoria booming but $80 billion budget dispute shows no sign of being fixed

July 20, 2015, Gareth Hutchens

NSW has the fastest-growing economy in Australia, while Victoria's population growth is outpacing nearly every other state's, as record-low interest rates and falling iron ore prices create increasingly favourable conditions for the eastern states.

It means the gap in economic activity is continuing to close between the country's mining and non-mining states, with the Reserve Bank's record-low rates doing exactly what they are supposed to do: fire up the finance sector, support retail sales and boost housing construction.

The latest Deloitte Access Economics Business Outlook report, for the June quarter, says after a decade of underperformance the NSW economy is likely going to be the fastest growing economy in 2014-15, edging out Western Australia for the top spot.

It says rising property prices in Sydney have boosted household wealth and consumer confidence, and helped retail turnover to grow at the fastest rate of any state.

But the report also cautions that things will not be this easy for NSW residents in a couple of years, as surging house prices will eventually mean slower population growth and higher mortgage costs.

"At some stage there will be a butcher's bill to pay from Sydney's higher housing prices," the Deloitte report warns.

"But that's a problem for down the track. For the moment, the bubbly's still flowing."

Using a different methodology to the Deloitte report, CommSec's economists say Victoria is clearly the second-best performing economy in Australia now, thanks to much-stronger population growth and housing demand.

It says NSW was the top-performing state for retail trade, housing construction and population growth, but Victoria has the second-fastest population growth.

Read more: http://www.smh.com.au/federal-politics/political-news/nsw-victoria-booming-but-80-billion-budget-dispute-shows-no-sign-of-being-fixed-20150719-gifnrl.html
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Shadow
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falling iron ore prices create increasingly favourable conditions for the eastern states
Something bears like Ted consistently fail to comprehend, despite it being explained to them repeatedly.
Edited by Shadow, 20 Jul 2015, 01:47 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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NSW saves the national economy from shrinking

September 5, 2015, Matt Wade and Jessica Irvine

A resurgent NSW was the only thing stopping the national economy from going into reverse last quarter, underlining the economic predicament facing the Abbott government as it marks its second anniversary.

The Australian economy would have shrunk by 1.1 per cent in the June quarter and flatlined last financial year without NSW's economic momentum, analysis by Commonwealth Bank's stockbroker, CommSec, shows.

Notwithstanding NSW's economic health the respected economist and former Reserve Bank board member, Warwick McKibbin, has warned there's now a 50 per cent chance Australia will slide into recession in the coming year.

Professor McKibbin told Fairfax Media the political "stalemate" over reform was now damaging the economy and warned the Reserve Bank had "already used up their ammunition" to boost growth.

"There aren't too many bright spots out there," Mr McKibbin said. "If you did absolutely nothing from now on…there is probably about 50 per cent probability over the next 12 months [of recession]".

Gross domestic product figures released on Wednesday showed the Australian economy grew by just 0.2 per cent in the June quarter and 2 per cent over the year.

CommSec economist Savanth Sebastian said the figures would have been far weaker if not for buoyant economic conditions in NSW.

"The NSW economy is well and truly ahead of the other states and territories now," he said.

On Monday it will be two years since the Abbott government came to power. The weaker than expected national growth has cast doubt on its budget figures.

NSW and Victoria grew at a solid pace in the June quarter, but the resources-rich economies of Queensland, Western Australia and the Northern Territory all contracted.

The analysis draws attention to how heavily the national economy is relying on NSW amid the transition following the mining boom.

Earlier this week, a new ANZ Bank "Stateometer" that measures economic performance in the states and territories showed NSW was "pulling ahead of the pack".

Read more: http://www.theage.com.au/nsw/nsw-saves-the-national-economy-from-shrinking-20150903-gjeejh.html
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Chris
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Shadow
20 Jul 2015, 01:47 PM
Something bears like Ted consistently fail to comprehend, despite it being explained to them repeatedly.
The strong economic growth is solely based on speculative asset price growth, derived from and driven by cheap and easy credit. Something that you fail to see.

Here's hoping your buy, draw off equity, buy draw off equity, buy, draw off equity, buy strategy pays off for us all, otherwise the proceeding recession will last 5-7 yrs.

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herbie
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Chris
7 Sep 2015, 05:49 PM
The strong economic growth is solely based on speculative asset price growth, derived from and driven by cheap and easy credit. Something that you fail to see.
Speculative? - A questionable assessment.

But driven by low interest rates? - Yes.

You see that. And I see that.

And he VERY probably does too - Despite your seemingly strange desire to tell him that he's a dill who doesn't?
Edited by herbie, 7 Sep 2015, 09:18 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Loki
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goneaway
7 Sep 2015, 08:46 PM
Speculative? - A questionable assessment.

Not sure where you are, but around these parts it is most definitely speculative. Why else would you borrow @ 4.5% and lease @ 1.5% nett rental return? In this area, that would cost you an average of $45K per year to hold it, with a capital gain last year of $255K.

Questionable assessment? I question your assessment that it is otherwise.


“Talk sense to a fool and he calls you foolish.” - Euripides
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herbie
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Loki
7 Sep 2015, 09:36 PM
Not sure where you are ...
I'm in SEQ. And who's borrowing? While you might, I pay cash. With the rental return here being rather better than the 1.5% pa figure you quote.
Edited by herbie, 7 Sep 2015, 09:44 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Loki
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goneaway
7 Sep 2015, 09:37 PM
I'm in SEQ.
And yet you questioned Chris' post about conditions in NSW.
Quote:
 
And who's borrowing?
Speculators.
Quote:
 
While you might, I pay cash.
I am neither a lender nor a debtor. (Strictly speaking, you cannot hold cash in the modern world without being a lender.)
Quote:
 
With the rental return here being rather better than the 1.5% pa figure you quote.
Interestingly though, NOT IN NSW.


“Talk sense to a fool and he calls you foolish.” - Euripides
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herbie
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Loki
7 Sep 2015, 09:59 PM
And yet you questioned Chris' post about conditions in NSW.

Speculators.

I am neither a lender nor a debtor. (Strictly speaking, you cannot hold cash in the modern world without being a lender.)

Interestingly though, NOT IN NSW.
Low rates are pushing up prices - In NSW - As they were meant to.

Both there and here.

And presumably mitigating against declines being as strong as they might - In areas where there have been declines.

There's eff all that's 'speculative' about that mate - It's just fact! Despite the fact you might feel to get all picky and tell me I can't comment because I don't live in the city (or State) that can't play footy ... LOL
Edited by herbie, 7 Sep 2015, 10:14 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Loki
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goneaway
7 Sep 2015, 10:13 PM
Low rates are pushing up prices - In NSW - As they were meant to.

Both there and here.

And presumably mitigating against declines being as strong as they might - In areas where there have been declines.

There's eff all that's 'speculative' about that mate - It's just fact! Despite the fact you might feel to get all picky and tell me I can't comment because I don't live in the city (or State) that can't play footy ... LOL
:lol

Speculative asset price growth doesn't mean the reasons for the asset price growth is speculative. It means that speculators are pushing up asset prices.

And THAT aint in question, so it aint questionable.

Capice?


“Talk sense to a fool and he calls you foolish.” - Euripides
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