Investec Asset Management strategist Michael Power said while Australian property prices had fallen six per cent since 2010, he expected them to fall further in the next 18 months to two years.
"We're not seeing anything like the US, Irish or Spanish property bust here," the South African-based strategist told a business lunch in Sydney.
"But I think over the next 18 months it could go down by double digits, 12 or even 15 (per cent). A 15 to 20 per cent (fall) would be my outside downside over the entire period."
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Dr Power said according to the The Economist Property Index, Australian residential prices were among the highest in world and had long seemed particularly elevated, something which eventually "catches up with you".
"When you see what Australia has done (in relation to property prices) you have to ask yourselves, you may be exceptional, but how exceptional are you," he said.
Mr Power said recent falls in retail sales across the country were another indication property prices would fall.
However unlike the devastating property bubble bursts in the US, Ireland and Spain, Australia was buffered by low unemployment, and had "real" interest rates compared to the zero or even negative rates in some countries.
"There's more protection on the downside here than the US or Spain or Ireland property burst," he said.http://news.smh.com.au/breaking-news-business/house-prices-tipped-to-fall-by-up-to-20-20120912-25s7d.html
This is no surprise. Think of the future. 99% against 1% with riot squads shooting down Americans in the streets. QB
U.S. income gap between rich, poor hits new high
U.S. poverty rate leveled off in 2011, but in California it hit a 16-year high, census data show. Also, middle- and lower-income groups took financial hits.
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 Claudia Pedroza, 39, and her daughter Karla Osorio wait in July at the Jefferson Action Center in Lakewood, Colo. Pedroza and her husband struggle to make ends meet for them and their four children. She was at the center to apply for help with food, toiletries and getting a new frying pan.(Kristem Wyatt, Associated Press / July 16, 2012) |
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September 12, 2012, 6:15 p.m.
WASHINGTON — The U.S. poverty rate leveled off last year for the first time since the Great Recession, but the halting recovery deepened the financial pain for middle-class families and pushed to a new high the income gap between the country's richest and poorest citizens.The number and share of people living in poverty was essentially unchanged from 2010 levels. That ended four straight years of increases, though not in California, where the rate rose to a 16-year high, the Census Bureau said Wednesday.There was no relief for the average American: The median household income, after adjusting for inflation, dropped 1.5% in 2011 from the previous year to $50,054. That is now 8.1% lower than in 2007, when the recession began late that year.The biggest hit fell on the middle- and lower-income groups, while upper-end households saw their incomes essentially unchanged. That raised one common index of inequality in America to an all-time high.The Obama administration cast the Census Bureau's annual report as evidence that the president's policies were taking hold after the deep recession. The report indicated that job growth in the South and in America's suburbs helped keep the poverty rate steady last year, at 15% of the population.And officials also took credit for the improvement in the nation's health insurance coverage rate, especially among young adults who, under the new healthcare law, can be covered under their parent's policies."It is clear that had President Obama not taken swift and aggressive action to grow our economy and create jobs, today's report would have shown much higher poverty rates, lower incomes and a greater share of the population without health insurance," said Rebecca Blank, the acting U.S. Secretary of Commerce.But the data on the continuing setback for average-income families give Obama's critics fresh material to challenge the president's dominant campaign message: that he is a defender of the middle class.Even as payroll employment has been growing since early 2010, many of the new jobs are low-paying. And while those added jobs are helping lift some people out of poverty, for those who once had higher incomes, those jobs are all that they can find in a weak labor market."It's the middle that seems to be struggling more than the poor," said Sheldon Danziger, a poverty expert and public policy professor at the University of Michigan.
http://www.latimes.com/business/la-fi-census-poverty-rate-20120913,0,4738274.story
The Dow's Calm Before the FedThe Dow Jones Industrial Average (INDEX: ^DJI) crept higher still today, gaining 10 points or almost 0.1% as the market shrugged off the day's two big news events and awaits word from the Federal Reserve tomorrow on interest rates and a possible new round of quantitative easing.
As expected, Germany's supreme court said the nation could participate in the European Stability Mechanism, the eurozone's new bailout fund. The decision made Germany the last country to approve the emergency funding and paved the way for the EU's biggest economy to contribute $245 billion to the $640 billion fund. The court did set restrictions on the funding including that it couldn't increase without parliamentary approval.
The major news event of the day, and probably the biggest one in the tech world this year, was of course the unveiling of Apple's (NAS: AAPL) iPhone 5. The device is thinner and 20% lighter than the old one, and it has a larger screen at 4 inches and improved resolution and quicker processing time, but there were no major surprises in the new phone. Apple shares finished a volatile trading day up 1.4%.
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