The housing finance data is likely to overshoot to the downside. Extreme housing bullishness has now rolled over, price declines are expected, and, like affordability, headed lower. This will create a fair bit of unemployment for those in related industries, as less…
…staff are needed, across banking, lawyering, estate agents, removalists, you name it. It’s why housing is at the centre of most cycles. Below shows the “by number” volumes.
In the short run, we think the uplift in net interest margins matters much more for the banks. They are well capitalised, and bad and doubtful debt charges are not likely to rise instantly.
Where we think we will see the impact, first, is in consumer discretionary names, as spending on non essential items gets pared back.
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