It’s not all doom and gloom

Shepparton News - - OPINION -


The po­lit­i­cal and eco­nomic head­winds ap­pear ter­ri­ble.

Lead­ing the charge to­wards the cliff are Syd­ney and Mel­bourne house prices.

Fol­low­ing years of ridicu­lous, non-sus­tain­able growth where price-toin­come ra­tios blew out to 10 in Syd­ney and eight in Mel­bourne, all ev­i­dence points to­wards a hous­ing crash.

Prices have al­ready col­lapsed 10 per cent in Syd­ney in the past year while auc­tion clear­ance rates dip down to 40 per cent.

A cou­ple who bought a year ago on a 10 per cent de­posit will be fac­ing neg­a­tive eq­uity — hard to stom­ach for the av­er­age home buyer, and an ab­so­lute dis­as­ter for in­vestors.

Those ‘‘I’m only 25 and own 10 in­vest­ment prop­er­ties’’ ar­ti­cles so loved Four stages of a hous­ing bub­ble: by me­dia spruik­ing real es­tate will need up­dat­ing.

‘‘I’m only 26 and fac­ing bank­ruptcy.’’ And this is just year one. De­spite the rhetoric, hous­ing bub­bles don’t ‘‘pop’’, they take years to run down.

Ire­land, the United States and Spain all ex­pe­ri­enced hous­ing bub­bles and sub­se­quent crashes fol­low­ing the 2007-2008 global fi­nan­cial cri­sis, and all took about five years to play out with price falls of about 50 per cent.

Thanks to the min­ing boom, Aus­tralia avoided the re­ces­sions felt in those coun­tries — cre­at­ing an ar­guably big­ger bub­ble than any of them.

Now it seems the pen­du­lum is fi­nally mak­ing its in­ex­orable re­turn swing.

The im­pact will rip­ple through the en­tire econ­omy, squeez­ing the life out of re­tail and con­struc­tion in our two ma­jor cities, and en­gen­der­ing the real pos­si­bil­ity of Aus­tralia’s first re­ces­sion in 25 years.

There is lit­tle our Re­serve Bank and fed­eral politi­cians can do about it.

In­ter­est rates are at record lows with hardly any room for cuts un­less we con­tem­plate neg­a­tive in­ter­est rates — a shocker of an out­come for those with sav­ings.

Prime Min­is­ter Scott Mor­ri­son has promised a balanced bud­get that gives room to go back into the red, but with gov­ern­ment debt stand­ing at a whop­ping halfa-tril­lion dol­lars, any such move will only shift the bur­den, if it works at all.

We are a small player in the world eco­nomic game, at the mercy of out­side forces.

China may come to our res­cue again as it did a decade ago with its in­sa­tiable hunger for our iron and other com­modi­ties.

But things are not look­ing that good for China ei­ther. Is­sues with debt and shrink­ing GDP are still play­ing out, com­pounded by an on-again/off-again trade war with the US.

And now for news.

Shep­par­ton is well placed to ride it all out.

House prices here did not go any­where near bub­ble ter­ri­tory.

Shep­par­ton may well ben­e­fit and ex­pe­ri­ence house price rises against the metro-falls as hous­ing in­vestors look for some­where rel­a­tively safe to park their cash with de­cent price-to-in­come ra­tios and rental yields.

The re­gion’s largely food­based ex­port mix will not be at the mercy of dis­cre­tionary spend­ing drops. Dur­ing a re­ces­sion, con­sumers cut back on hol­i­days and lux­ury goods, not di­etary sta­ples.

A hous­ing-led down­turn is a real pos­si­bil­ity next year, but Shep­par­ton could well avoid the worst of it. ● Myles Peter­son is a jour­nal­ist at The News. the good Happy birth­day to­day to Trinida­dian-born Amer­i­can singer and rap­per Nicki Mi­naj (1982-). Mi­naj is not afraid to show off one of her big­gest non­mu­si­cal as­sets. Not for the first time, the volup­tuous Amer­i­can singer and rap­per’s booty was front and cen­tre in her lat­est video clip for sin­gle Good Form, from her re­cently-re­leased fourth stu­dio al­bum Queen. Onika Tanya Maraj, bet­ter known as Nicki Mi­naj, was born in the Trinidad and Tobago dis­trict of St James. As a teen, she moved with her mother to the United States and at­tended an arts school where she ma­jored in drama. Mi­naj ini­tially wanted to be an ac­tor, but al­ways had an in­ter­est in rap mu­sic and started mak­ing her own songs at 12. She took on back-up singer roles be­fore be­ing no­ticed on so­cial me­dia by mu­sic ex­ec­u­tives and soon signed to la­bel Dirty Money. It led to Mi­naj col­lab­o­rat­ing with well-known rap­per Lil Wayne. Their first of three mix­tapes was re­leased in 2007 and, three years later, she re­leased her first sin­gle Mas­sive At­tack. The song did not make the cut on her de­but al­bum Pink Fri­day, which rock­eted to se­cond on the Bill­board 200 with 375 000 first-week sales. Mi­naj re­leased fol­low-up al­bum Pink Fri­day: Ro­man Reloaded in 2012, with lead sin­gle Star­ships be­com­ing the fifth-high­est sell­ing song of the year. That same year, the diminu­tive rap­per’s pro­file was boosted when she joined Mariah Carey, Keith Ur­ban and Randy Jackson as an Amer­i­can Idol judge for the 12th sea­son. Her star power was then called on to per­form along­side Madonna at the 2013 Su­per Bowl half-time show. She dropped her third LP The Pinkprint in late 2014 but fans had to wait al­most four years for her next full-length solo of­fer­ing, Queen.

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