While no one we know was there to see it, we can imagine it was a very sombre moment.
Earlier this month a rather ordinary looking peach coloured fibro house in the mining port town of Port Headland was up for auction. The auction didn’t go so well. The bidding fell over at $360,000 without meeting the reserve.
While that is an everyday occurrence – auctions do fail when the bidding doesn’t meet the reserve. This was a special case. That ordinary looking peach coloured fibro house last sold in 2011 for $1.3 million.
This is an important story because it’s a reminder of what can happen when a speculative frenzy builds in remote mining town real estate. It often ends badly.
It’s also a reminder there’s more to Australian real estate than ever increasing prices in Sydney and Melbourne. There’s the booms and busts in mining towns, while many regional areas have not seen capital growth since 2009.
Interest Rates & the Australian Dollar
Getting interest rate predictions right appears to be a sign of manliness in economic circles. When the calls are right, chests are puffed out and economists have testosterone steaming out their ears as they remind all and sundry “they were right”.
And to milk it for everything they can, it’s important to have an inattentive media on side to remind everyone of their predictive abilities.
Misa Han of The Sydney Morning Herald was this week’s inattentive reporter:
One of the few economists to get the February rate cut by the Reserve Bank right has changed tack, calling an earlier end to the central bank’s easing cycle and saying the Australian dollar may have bottomed.
The economist was Stephen Koukoulas, whose website modestly bills him as “Australia’s leading economist and speaker”
According to the article because Koukoulas had picked the last interest rate move he was now worth listening to on the direction of the Australian dollar. In this instance it seems one good prediction sets the scene for the next, but before paying attention wouldn’t it be better to have a wider picture of Koukoulas’ past interest rate predictions?
There is a chance of a rate hike in February, but more likely March after the market is softened up with a hawkish statement next month – 9 January 2014. Didn’t happen.
I remain firmly of the view that the RBA will be hiking interest rates soon, probably as soon as March – 22 January 2014. Didn’t happen.
The most bullish forecast is from Stephen Koukoulas of Market Economics, who expects 3.5 per cent by the end of the year and 3 per cent by June – 1 February 2014. Didn’t happen.
Just the one economic outfit, Market Economics Pty Ltd predicts a rate rise in May. That’s Stephen Koukoulas – 31 March 2014. Didn’t Happen.
We do congratulate Mr Koukoulas on his good guess earlier this month though.
This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.
