This from the Australian Financial Review (overnight), sounding a little alarmist
But, the article is from Warren Hogan and he is a smart cookie indeed
RBA governor ... outline(d) two equally likely scenarios for the Australian economy
- positive scenario ... is that the economy rides out the adjustment in Sydney and Melbourne housing markets as well as emerging global risks
- other scenario is one where households respond to falling property values and persistently low real income growth with less spending. A retrenchment of consumer spending forces the hand of business which in turn pulls back on investment and hiring plans.
Hogan concludes on the positive side:
- The fact that the housing adjustment is happening against a backdrop of falling unemployment and low interest rates gives some credence to the view that the economy can ride this out
here is the link for more, may be gated.
