doubts rise around uplift in housing construct, page-3

Sector Lead

The chart shows where we are on this rate cut cycle relative to the other times rates have been eased. You can see quite clearly that the cuts aren't having the desired effect as the last 4 rate cutting cycles for housing growth.

It's different this time, more overpriced housing and debt fuelled booms is the last this Australia needs right now, households are maxxed out and trying to deleverage.

That uptick on the last chart is simply noise related to the 25 basis point cut in October, it's a desperate plea that the small uptick is somehow the start of a major chart correction. Much the the same way the bull's rejoice if RP data's index comes back in the black for a month after a prior quarter in the red.

Building stocks are up because of the seeds planted by the RBA/Spruikers in mainstream media that housing will replace the mining boom and they lead indicator that the boom is back is that finance approvals are up.

Funny point is that finance approvals are bouncing from such a historically low base, any 'burp' in the numbers will cause a large percentage point swing, and of course, your average real estate punter see's only a large percentage movement and generally aren't smart enough to enquire as to from what base that percentage swing is coming from.

Historically, the construction numbers are in the toilet and have been for years now, but any bounce is worth spruiking about...