Where’s the Sense?

The U-turn Universe

Monday: hold. Thursday: hike. Welcome to forecasting. The economic narrative took a remarkably impressive U-turn in the space of a few days. After July’s employment figures showed unemployment rising, CBA, NAB and ANZ all reckoned the softer labour market reduced chances of another rate rise. CBA was so confident it had the future sorted that it was forecasting 4.35 per cent for the rest of 2026.

Then inflation arrived and ruined everyone’s week. CBA has now joined ANZ in predicting a 25-basis-point rise in November, taking the cash rate to 4.60 per cent. NAB is reviewing its forecast while, for the moment, Westpac remains in the cut camp for 2027. The lesson? Economic forecasts can change before you’ve finished reading them.

A Perfect Storm

Apparently, everyone wants to sell. Just not at today’s prices.

The number of “For Sale” signs decorating Australian front lawns continues to grow. It’s estimated there are about 30,000 more properties sitting on the market than the long-term average. Worse, with the spring selling season due next week analysts expect to see a lot more houses looking for buyers.

It gets uglier. ANZ is forecasting an 11 per cent fall in national house prices and 14.5 per cent in Sydney. Add higher mortgage costs, construction costs up 6 per cent and the collapse of Sydney builder Bathla Group with $3.6 billion in debts, and suddenly the property market doesn’t look quite so bulletproof. Sellers are piling up against each other while buyers sit on their hands. The “property boom” has turned into a queue.

A Strange Little Turf War

There isn’t just one property market. While sellers in the middle and top ends struggle, there’s a turf war emerging at the bottom end. Investors and first-home buyers are ferociously competing for cheaper properties, particularly new builds and house-and-land packages. Investors want cash flow and favourable tax concessions, while first-home buyers confront reduced borrowing power.

One buyer’s agent has turned to the recipe books to find an apt description of the situation. He says first-home buyers and investors have apparently been “pancaked” into the same markets. Which is an interesting outcome for a policy supposedly designed to make life easier for first-home buyers.

Will Your Mortgage Outlive You?

For generations, the great Australian housing plan was simple: buy a house, pay it off and arrive at retirement with a roof over your head and a few dollars left in the bank.

For the most part, Baby Boomers have followed the plan with 70% owning their homes outright.

The kids have another idea.

A Vanguard survey of more than 1800 Australians found 48 per cent of Gen Z’s and 37 per cent of Millennials expect to still have a mortgage when they retire. Of those who will carry the debt into retirement, 39 per cent plan to use their super to pay it off.

The housing equation has changed dramatically. Nearly half of working-age Australians surveyed don’t even have a retirement plan.

Your Money is Safe. Probably

Apparently protecting customers from scammers wasn’t compulsory.

HSBC has been fined $35 million after the Federal Court found widespread and systematic failures in its handling of scams. Its customers lost $34.6 million to impersonation and spoofing scams between 2020 and 2024, with the bank taking an average of 144 days to investigate scam reports.

Victims are now questioning how HSBC is calculating their compensation. It’s not covering itself in glory in that department either.

One victim who lost $49,900 from his mortgage account was initially offered a derisory $300. It took 12 months and support from the Australian Financial Complaints Authority to finally attract an offer of $45,000 which he accepted. HSBC says it has strengthened its fraud and scam systems. Which is reassuring. Or not.

IN CASE YOU MISSED IT…..

Business Borrows, but doesn’t buy: Business loan demand rose 6.2 per cent in July, but asset-finance demand fell 9.1 per cent. In other words, businesses are borrowing to keep the cash flowing while putting the new machinery on hold. Sensible perhaps. Encouraging? Depends what the machinery was supposed to do.

The Last Word

So, there it is. Rates are steady, then they’re not. Buyers are abandoning the market, then diving back in to fight off investors. Property prices are all over the place and apparently retirement now means hoping your super will cover the mortgage.

Thankfully, economists, bankers, property analysts, politicians and media pundits are all available to explain it. They know what’s going on, until they don’t.