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New Australian House Price Record + Cheap Bonds

Christopher Joye

Coolabah Capital

In The AFR I reveal that a new Australian house price record has been set; again take the RBA to task for both claiming house prices fell in July (they rose 0.8% and have jumped another 0.8% in August) and that growth this year has been weak (over the first 8 months of 2016 house prices have appreciated at a 9.9% annualised pace); dedicate the second third of the column to explaining how you could have generated high returns from very safe assets with low yields this year via specific case studies (noting that these trades have different holding periods and can only be objectively compared using time-adjusted internal rates of annualised return---a question that came up in my presentation during the week to the Portfolio Construction Forum); and finally argue that the major banks' senior-ranking bonds look pretty cheap right now given circa 2.75 per cent annual interest rates that are well above the post-GFC "tights" in mid 2014 of around 2.35 per cent in current interest rate terms. Free (VIEW LINK)

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Christopher Joye
Portfolio Manager & Chief Investment Officer
Coolabah Capital

Chris co-founded Coolabah in 2011, which today runs $7 billion with a team of 33 executives focussed on generating credit alpha from mispricings across fixed-income markets. In 2019, Chris was selected as one of FE fundinfo’s Top 10 “Alpha...

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