I've considered it as though we've woken up from a heavy nights drinking, thinking "Oh not so bad i dont have a hangover" but the reality is we are still drunk on cheap, free flowing capital. That won't last and once those hangover's come knocking there is going to be pain and despair.
Using lockdowns countries like NZ and AUS have traded wealth for life, notwithstanding your position on this, that wealth is going to go through a redistribution phase. Small business owners who have had to extend their credit lines to breaking (home owner and none) some will manage to get back on their feet while others will unfortunately end up needing to pay the bill for COVID lockdowns. Home owners who've been at a high LVR and have unfortunately lost their jobs will be the first targets however, even low LVR customers will be in trouble if their income is too significantly impacted for refinancing opportunities.
Hopefully CH2 will be able to get into those situations and help bring some hope to people that they can soldier through it
I've mentioned before I don't anticipate the above scenario will cause a housing crash. The Government still has a few levers available to keep housing prices stable. Some of these levers, like regulatory restrictions, will ultimately have a negative long-term impact on the financial well being of many as you increase the level of financial stress permissible you push more people out onto the edges of insolvency for which a gust of wind will push them over. Regardless Insolvency occurs on any normal market even during growth primarily due to customers either becoming overburdened by debts or by having a sudden loss of income. Both of which now have further weight pushed on them due to COVID and lockdowns.
Just have to wait now. The level of Government support will keep the party rolling a little bit longer.
CI1 Price at posting:
2.6¢ Sentiment: Buy Disclosure: Held
(20min delay)