RBA gets housing wrong again as market booms

Christopher Joye

Coolabah Capital

In The AFR I highlight how Australia's 3.5 year long housing boom---exemplified by the Sydney and Melbourne auction clearance rates soaring to 86% and 76% respectively on the weekend---is once again humiliating the RBA, which is losing credibility every time it cuts rates on the claim housing conditions are cooling or under control when this is not remotely true. Following the August cut the RBA told the community that: "dwelling prices have been rising only moderately over the course of this year" (wrong); "housing prices declined in most capital cities in July" (wrong); "auction clearance rates ... [are] lower than a year ago" (wrong); and "the likelihood of lower interest rates exacerbating risks in the housing market has diminished" (wrong). The RBA also fabricated a completely BS reason as to why it suddenly junked its preferred daily "hedonic" house price index for its previously non-preferred, and much more prone to bias, "stratified median price" index. Check out my chart showing how Australia's house price-to-income ratio has hit a new record high of 5.7 times. Free (VIEW LINK)

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...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Sign In or Join Free to comment