More bad news out today from the ABS. Retail sales fell a seasonally-adjusted 1.1 percent in October, surprising economists who expected a 0.4 percent increase. Discretionary spending was hit the most as households funnelled more money into debt repayments to service skyrocking mortgages.
ยป 8501.0 – Retail Trade, Australia, Oct 2010 – ABS, 2nd December 2010.
What a surprise. Seriously do we really need ABS to tell us this.
We all know large debt equals less disposable cash and with the strong Aussie dollar everyone is importing overseas goods.
Less spending in Australia means companies make less profit and more Aussie people lose jobs. Exporters have it tough as they can’t compete internationally.
Unemployment goes up or peoples salaries get slashed and can’t service the debt of that beast of a mortgage.
With lower salaries and higher unemployment leads to less lending by the banks.
Less lending by the banks crashes the market as housing supply spirals up and up and up and up with all those re-possessions and failed auctions accumulating day by day.
Keep saving people.
“A group of up to 25 credit unions is planning to combine forces to create an investment vehicle aimed at raising up to $1 billion dollars to compete with major banks on mortgages, Fairfax Media reports.
The Australian Prudential Regulation Authority has given in-principle support to the plan, which would see the group raise funds through superannuation savings and international money markets, the report said.”
THIS IS DUMB, THIS IS REALLY DUMB…..
People’s super is being used to get cheaper loans……. if the loans turn sour people will have no super either.
I also read yesterday that people intend to keep on buying property because they don’t trust shares or any other investment medium. The report also rants on about how these buyers are forced to forgo many other enjoyments just to buy a place…. well heres an idea….. DON’T DO IT!
It was also stated that the majority of Australians still believe property is the road to wealth and financial success….. the road? the road?, oh you mean the yellow brick road….. in Oz… wasn’t that a work of fiction?
But think of the Harvey Norman’s what will happen to them? Oh the humanity!
I have in the last 2 months spent just over $1000 overseas due to the fact that it was 40-50% cheaper by buying overseas. This factored in the shipping cost as well! Compare to what the retailers are asking here.
Gerry Harvey can go bonkers all he wants, I aint earning my money so I can be ripped off by him.
As I have often said economists are not worth a pinch! I called it back in May that this is how things would be unfolding by Xmass and hear we are, retail headed to the bottom of the sea. People have started running out of cheap money and now they are starting to feel the pain of high debts guess where this will end????? POP go’s the econ!
November is going to be bad for retail, lets see how the retail figures fare over XMAS, this will be telling. Watch for an uptick in unemployment in Jan/Feb as retail jobs are shed.
Hey Free Willy,
I’ve got this thing all worked out out, all Harvey Norman’s gotta do is start selling residential property.
E-E-Easy!
It’s not JUST the mortgages – it’s also all the other unavoidable service costs – power, gas, water, telecoms – the “Usual Suspects”. These all have to be met on top of increasing mortgage payments, and it all adds into the financial mix. For those without access to solar hot water, and outdoor clothes drying capacity (i.e. the armies of Unit dwellers in Metropolitan areas), the spiralling costs of electricity are going to be a major factor, especially in view of the strange weather in VIC, NSW and QLD. these past months.
Oh, come on people. Just think happy thoughts. The clever people are running the show. It’ll all be fine.
Stedlar, Just like the ‘clever people’ are running the EU and US ……………hmmmmmmmmm
@ romsey
Don’t give him any ideas LOL! Go HARVEY!