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Retail in Dire Straits
Topic Started: 18 Dec 2016, 09:13 PM (5,412 Views)
vdmruss
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Perhaps there is a tightening in respect to consumer credit happening in the background (credit cards), less credit available and aversion to spending what little savings people have?

I've noticed something a bit odd last week (Sunday, 18th). I easily found spot in Macquarie Centre (Macquarie Park, Syd) in the afternoon. That can't be normal, considering I've seen touting that 17th was supposed to be the big day of pre-Christmas spending. If people are a bit tight in Macquarie Park, which is one of the best of (if not best) areas in Australia in terms of growth (http://www.propertyobserver.com.au/forward-planning/investment-strategy/economy-and-demographics/29235-location-location-australias-most-productive-areas-for-economic-growth-revealed.html), what can be said for the rest?

Has anyone else observed a decrease in shopping centre traffic, in Syd at least?
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Ex BP Golly
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Terry
23 Dec 2016, 08:33 PM
Thanks for posting reference to the Rabobank monitor. If 46% of the working population has 1 months savings or less, that is similar to other data I have seen. Pretty much paycheck to paycheck living. That's indicative of the tapped out financial condition of the suburbanites.
Most of them in the less than one months savings category are property investors who heard something at a property seminar that every dollar not leveraged is a dollar discarded.

That are living in fear of the next rentals hot water system, or oven going pop however, and need to put off all repairs till at least the next rent day.

The rest of society is too smart to have less than one months savings, except for uni students, who are working on rectifying that problem.
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John Frum
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Terry
23 Dec 2016, 08:33 PM
Thanks for posting reference to the Rabobank monitor. If 46% of the working population has 1 months savings or less, that is similar to other data I have seen. Pretty much paycheck to paycheck living. That's indicative of the tapped out financial condition of the suburbanites.
RBA can cut another 2%, and if the bond market manages to stabilise this year then hopefully the banks can pass on half of that to the suburbanites.

That's around $100p/w back in the pocket of your average $600k mortgage holder. Add to that another $30k of equity to draw down on from a 5% rise in valuation, and you might not have the full blown patio rework or italian marble benches to get the tongues wagging at the next BBQ, but at least you can pay a term or two's worth of private school fees, and fix that embarrassing dent at the back of the Q3 that the other mums have been gossiping about in the pre-bell playground chatter.

Perhaps there'll be enough to fork out for one of those lovely black glass splashbacks that bunnings have on sale at the moment, although with hubby currently chalking up plenty of overtime it might end up sitting in the shed for a wee while.
vdmruss
24 Dec 2016, 12:54 PM
Perhaps there is a tightening in respect to consumer credit happening in the background (credit cards), less credit available and aversion to spending what little savings people have?

I've noticed something a bit odd last week (Sunday, 18th). I easily found spot in Macquarie Centre (Macquarie Park, Syd) in the afternoon. That can't be normal, considering I've seen touting that 17th was supposed to be the big day of pre-Christmas spending. If people are a bit tight in Macquarie Park, which is one of the best of (if not best) areas in Australia in terms of growth (http://www.propertyobserver.com.au/forward-planning/investment-strategy/economy-and-demographics/29235-location-location-australias-most-productive-areas-for-economic-growth-revealed.html), what can be said for the rest?

Has anyone else observed a decrease in shopping centre traffic, in Syd at least?

I too shop in the Ryde/Maquarie area, but due to me not doing this on a regular basis i can't really compare the number of shoppers i saw last week to historical trends.

A fabulously wealthy baby boomer relative (and, unsurprisingly, a rampant property bull) has however noted a severe reduction in the volume of traffic in the sorts of shopping precincts she normally frequents (QVB, Westfields, Pitt St mall etc etc.)

Just a flesh wound surely.
Edited by John Frum, 25 Dec 2016, 05:07 PM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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Jimbo
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vdmruss
24 Dec 2016, 12:54 PM
Perhaps there is a tightening in respect to consumer credit happening in the background (credit cards), less credit available and aversion to spending what little savings people have?
I was in a Sainsbury yesterday afternoon in North London. We bought some of their Pizzas and other snacks for Christmas Eve munchies.

Place was jammed out solid. People buying the whole shooting match as well. Turkey and all the trimmings on the last day?

Been like it in London every day since we arrived. Shops jammed full of people.

A lot of online stuff as well. Amazon booked up one in ten of all available contract couriers in the country for the last week of trading (this is in addition to their own fleet).

Mind you, the poms love their credit cards.

"Per household, that's an average consumer credit debt of £7,042 in October, up from a revised £6,999 in September – and £476.07 extra per household over the year. It also means the average consumer credit borrowing stood at £3,765 per UK adult. ... Total credit card debt in October 2016 was £66.2bn."
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Terry
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John Frum
25 Dec 2016, 04:48 PM
RBA can cut another 2%, and if the bond market manages to stabilise this year then hopefully the banks can pass on half of that to the suburbanites.

That's around $100p/w back in the pocket of your average $600k mortgage holder. Add to that another $30k of equity to draw down on from a 5% rise in valuation, and you might not have the full blown patio rework or italian marble benches to get the tongues wagging at the next BBQ, but at least you can pay a term or two's worth of private school fees, and fix that embarrassing dent at the back of the Q3 that the other mums have been gossiping about in the pre-bell playground chatter.

Perhaps there'll be enough to fork out for one of those lovely black glass splashbacks that bunnings have on sale at the moment, although with hubby currently chalking up plenty of overtime it might end up sitting in the shed for a wee while.


Most of the research about how much cash the suburbanites actually have access to is usually commissioned by private institutions. It's a massive grey area, but directionally we can infer that most of them are close to the bone, despite the perceived value of their superannuation and their houses. You don't read about about it much in the media as its generally not pretty. The banks would be able to do some good analysis if they wanted to and the credit card companies would have a good idea too.
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Rufus
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Terry
25 Dec 2016, 08:02 PM
Most of the research about how much cash the suburbanites actually have access to is usually commissioned by private institutions. It's a massive grey area, but directionally we can infer that most of them are close to the bone, despite the perceived value of their superannuation and their houses. You don't read about about it much in the media as its generally not pretty. The banks would be able to do some good analysis if they wanted to and the credit card companies would have a good idea too.
Ha ha ha - thanks I needed that.

Merry Xmas Terry.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Jon Snow
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Terry
25 Dec 2016, 08:02 PM
The banks would be able to do some good analysis if they wanted to and the credit card companies would have a good idea too.
The banks do lots of analysis, but their findings are not for public consumption. Don't want to frighten the chickens. There is a significant percentage who are right at the bleeding edge of liquidity. Credit cards maxed out or close to maxed out, mortgage payments consuming one whole income, if the other income goes, bam!

It all hinges on employment.
Speak when you are angry and you will make the best speech you will ever regret.
Ambrose Bierce
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Terry
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Rufus
25 Dec 2016, 08:26 PM
Ha ha ha - thanks I needed that.

Merry Xmas Terry.
Glad you're amused. The other key players now in understanding the plight of the suburbanites are the the major retailers and manufacturers who collect data on their spending habits. This is particularly powerful in the Anglosphere countries, but much less so in countries where shopping channels for FMCG products are more fragmented, such as China and the developing countries where traditional trade is still ubiquitous.
Jon Snow
25 Dec 2016, 09:03 PM
The banks do lots of analysis, but their findings are not for public consumption. Don't want to frighten the chickens. There is a significant percentage who are right at the bleeding edge of liquidity. Credit cards maxed out or close to maxed out, mortgage payments consuming one whole income, if the other income goes, bam!

It all hinges on employment.
Regarding bank analysis, yes and know. It would be quite straightforward for them to estimate how much each h'hold has in cash savings. But you're right: It's not the kind of information that you would want to be bandied about in public. Rabobank is a bit player and can get away with running a representative survey that the Big 4 can easily deflect if they were asked how comfortable they are with their customers' liquidity.
Edited by Terry, 25 Dec 2016, 09:25 PM.
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herbie
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Terry
25 Dec 2016, 09:09 PM
"yes and know"
Did ya actually mean ta say that Tezza? Or are ya just makin' a funny? Or did ya just f*** up?
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Rufus
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Terry
25 Dec 2016, 09:09 PM
Regarding bank analysis, yes and know. It would be quite straightforward for them to estimate how much each h'hold has in cash savings. But you're right: It's not the kind of information that you would want to be bandied about in public. Rabobank is a bit player and can get away with running a representative survey that the Big 4 can easily deflect if they were asked how comfortable they are with their customers' liquidity.
It's not at all straightforward for the banks to calculate how much each household has in savings. It's been decades since households had their loans, credit cards, and savings accounts all with the one institution. Banks can only look within their own accounts, they absolutely have zero access to information on savings or debts with other organisations unless the client is in the process of applying for a loan at the time, and divulges that information.

At best they can make an educated guess on financial well being based on the arrears in their loan book, which is information available to us.
Take risks - if you win you will become wealthy, if you lose you will become wise
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