Australian economy forecast 2020 | Housing, jobs and recession

You know the increasing wages, should, um
that’s complicated to explain. Hello and welcome to our second video following the roundup
of the economy in 2019. This is our forecast for the Australian economy in 2020. We asked
our panel of 40 leading experts and economists in Australia, how likely or unlikely they
think 12 different scenarios are to happen in the next year. We’re looking at everything
from the housing market to jobs to the Australian dollar to the economy. In this video, we will
round up our forecast for the year 2020. First up is the housing market. We asked economists
whether they expect the pretty dramatic house price increases we’ve seen towards the end
of 2019, if they expect those to increase and continue through 2020 or if they expect
this is a dead cat bounce of this is a blip on the graph? House prices of currency collapse
back next year. In other words, we asked them if the highest price increases are stainable?
52% of economists told us that they think it’s likely that house prices will increase
to beyond where they were in 2019 in 2020. More interestingly that when we asked economists
how likely it is that prices will fall, then only 12% of economists told us that it was
likely house prices will fall in 2020. So the general forecast from economist is positive
when it comes to house prices, whether that will actually happen, where we need to watch
this space. Well, we also ask them about mortgage defaults. And this is when people can’t pay
back their home loan and have to get into trouble with the bank. We’ve seen a slight
increase in the percentage of Australians facing mortgage defaults in 2019. We asked
economists how likely it is that that’s going to increase again in 2020. And 78% said it
was unlikely so we’re looking at a comfortable enough year for Australian borrowers. The
second thing we looked at the housing market was the federal government’s new plan to make
it easier for first time buyers to get on the housing ladder basis. If you’re buying
for the first time you normally need a 20% deposit, but the federal government as part
of the election, promised have introduced a scheme to get first homebuyers on the ladder
with only a 5% deposit. Now that should lead to more borrowers in the market. You would
think that would have an impact on the market, but maybe not so much we asked economists
do they think this will have any significant impact on the market? 90% of them said they
did not expect it to really have any impact at all. Now, one of the big reasons here is
the borrowing limits the government is putting on the availability of the loans to consumers.
For example, in Sydney, you cannot buy a house for more than 700 K to qualify for these 5%
borrowing loans. Now as you know, in Sydney, you can barely get a parking space for that
in many areas. And we have a table on the screen here we’ll just show you the limits
you can borrow in various different cities and states across the country. As you can
see they’re quite low, so not many people are going to qualify for this scheme. Finally,
we asked economists where they would invest their money if they had to buy a house in
any of the capital cities in Australia. Where would they invest the money in 2020, Brisbane
and Melbourne came out on top, Sydney place relatively low, which is usually the star
of the Australian housing market. So you know, that was where economists would place their
money. If you’re going to invest, you might need to consider those cities watch this space
to see how those prices grow. And if they do. We have seen the employment figures in
Australia the jobs figures full over the last while and it’s not looking too good there.
When we asked economists how likely it is that the employment figures will continue
to fall, 64% of them told us that it is likely we will continue to see them fall. In jobs,
we’ve also seen wage growth slowing in 2019. So the amount of money people get paid is
increasing at a slower rate. We asked economists whether that will continue to drop in 2020.
And they said no, 70% of economists around that said that wage growth will not continue
to slow next year. So if that’s true, you know, the majority of Australians could be
looking at slightly more money in their pay packet. Well, we also ask them about retail.
Now we’ve seen a very difficult year for retailers in Australia we’ve seen some large, higher
end retailers struggling we’ve seen a big shift online, a big shift to overseas purchasing
to with people like Amazon launching in the Australian marketing and sucking up that online
customer. Well, we asked economist if new car sales are going to fall in Australia,
these are generally a good barometer of a healthy economy. They fall in recently, but
it was bit 50-50. In terms of weather economists think they’re going to fall in the future.
But on top of that, we also asked them how likely it was that retail sales would recover
next year. In this case, we’ve got nearly 70% of economists expecting some sort of recovery.
So that could be a good thing for potential retailers in the market. When it comes to the Aussie dollar, well,
it’s been dropping in value of light and that’s going to continue when we asked economists
whether the Aussie dollar will continue to drop in value in 2020, 80% of them said they
do expect it to continue to decline. So that means less value for Australians travelling
overseas, maybe you want to have your holiday at home, put more money in the Australian
economy. Second thing we’re looking at here is quantitative easing, which are called QE,
because quantitative easing is pretty difficult to say. This is basically what central banks
do when they run out of options, and aren’t getting any results and boost in the economy
from causing cash rates like the idea has been doing when this happens. And option that’s
open to banks, which we’ve seen happen in the US and in the EU is called QE, where they
basically print money and pump it into the economy in order to stimulate the economy,
then withdraw that money further down the line. Now we’ve been asking economists how
likely it is we’ll see QE in 2020. And the number of economists saying it’s likely has
gone up and up and up. Now it’s about half of economists that could very well the on
the cards. One of the other ways we could go instead of introducing QE is to go to a
zero percent. Contract currently contract all the way down to zero. That will be three
more cuts on top of the three we’ve seen, but economists think that only be 73% of them
are saying they do not expect to see a zero percent cash rate next year. This is kind
of backed up by the RBA who’ve also indicated they don’t favour cash, right? And they would
probably favour or QE if it did get to that. And finally, we’re gonna look at the big one.
How likely is a recession in Australia in 2020? We’ve done two videos on this looking
at the arguments for and against a recession happening at 2020 links to those in the description.
But when we asked economists the results were strongly against the likelihood of recession,
only 9% of economists said they expected a recession was likely in 2020. Interestingly,
when we asked the public so we’ve got 40 economists we also surveyed 7000 Australians, half of
them think that a recession is likely. If you looked at the videos we produced the video
with the argument for recession has many more views of the video against so this definitely
appetite for recession among the public but not among the people in the know. So that’s
our roundup of 2020. Lots of links in the description more information on those. You
can follow my insights blog on finder for more info on the economy in 2020. Stay with
us next year to find out how we go on this rollercoaster ride. If you’re interested in
getting involved with the conversation, tell us what your forecast is for 2020. What do
you expect to see in the Australian economy next year? Comments below we’ll see if we
can get a conversation going

9 Replies to “Australian economy forecast 2020 | Housing, jobs and recession”

  1. Not surprised the general population expect a recession. The media does a good job at that. At least 8 months ago analysts said they expected a recession by 2021 though we should really be investing in a way that it doesn't matter. Further, then the issue of what people even think a recession comes into play.

  2. its going to increase because 40 percent of loans in 2015 were interest only! so now MANY will now need to pay the actual fcking house. You will see a lot of listings in 2020.. all want a mill too… hahaha its goona crash

  3. Hard to have a headline GDP technical recession when you're increasing population by 1.7% a year. But the per capita recession? Oh that's very real and happening now.

  4. Pointless video doesn't even give a facts & details on the economists in the study so the information is irrelevant.

  5. My prediction:
    Australia, moving sideways most of 2020 with a flattening of the recent price rises, other parts like underemployment, low wage growth, store closures will increase and in Q3 or Q4 we will start experiencing a massive drop in housing. And in May 2021 we will have official negative growth for the last 2-3 quarters.

    US, will push strong going into the November 2020 for trumps election, main Street will start to separate from assets like equities similar to what's happening here in Australia. Regardless of who gets elected, may 2021 will likely show that things are not going so flash and all the liquidity issues will come home to roost, and it will time well with the recent yield curve crossover.

    Australia is damned no matter what, most developers are trying to ditch their recent builds as quickly as possible and most boomers I know are waiting for prices to rise a fraction before off loading their investments.

    It is always the unexpected that bites us and currently the most unexpected thing is inflation, if that suddenly runs like crazy, well, we could very well see the highest interest rates of the last 30 years land on us and that will destroy the current Middle class but pave way for the younger generation to flourish on que. .

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