The RBA is the arbiter in this environment, not us. We have no influence over it whatsoever. Affordability is the most sensitive component to house prices. After that comes supply and demand, or demand and supply, but affordability first and foremost. The RBA doesn’t determine supply, but indirectly they can influence supply.
The RBA does determine affordability. Let’s have a look at it. You read a lot of stuff and I write for the newspapers every week. I do 9 new publications a week. I am one of those journalists, let’s call it sort of journalist to commerce, I’m one of those journalists, I’m always looking to think, I’m always thinking about, “Gee, what am I going to write about this week? I’m desperate for a story.” Every six month period I just basically do the same stories and I just keep regurgitating and upgrading them, which you’re a journalist, too. I’m always looking for an edge.
There’s nothing new in what I write, there’s nothing new in what any journalist writes, it’s the same crap every year, year after year after year. I know in January I’ve got to start talking about fixed rates. I know in June I’ve got to start talking about fixed rates. I know when every time the RBA is going to make an announcement, I’m talking about whether they’re going to put rates up or down. We they do make the announcement, I’m talking about why they put rates up and down, et cetera. Then, some information comes out, some dollar comes out, it’s about the Aussie dollar, et cetera, I’ll talk about the Aussie dollar.
What I think is not helpful in what I do, what other journalists do, is that it’s actually we compartmentalize various factors that affect interest rates in this country, and property prices in our stories. As a result of that we, all of us, take our eye off the overall view. We take our eye off the ball and we start to focus on that one component. Each of the components has a different weight in the sum of deciding what happens with interest rates because there are a number of components.
What I’m going to do today is talk to you about what I consider to be the ten most important components of what happens in this country that ultimately affect interest rates, that ultimately influence house prices, and supply and demand. I’d rather say it again. I would like to talk to you about today the ten most important things that ultimately determine interest rates, which ultimately determine let’s call it affordability, which ultimately determine prices.
I left out affordability in the first way I explained it. That’s my sequence, the ten most important things. Now what I’m saying to you here is, read what you bloody like, I mean, there’s so many things to read, so many publications. There’s the Internet as well, there’s online stuff, The Fair-fax, there’s News Limit, there’s newspapers you pick up every day, Fin Review.
As I said, I write in those papers, I know all the young kids, I’m the oldest bloke there, all these kids, I know what they’re doing. They’re desperate. They come talking, they say, “Well, what are going to write about? What about if I write about this? What do you think?” It’s the same stuff year after year. Its important to know when you’re reading this stuff, where it fits. Let’s have a look at them. My view, it’s my view right? It’s not anyone else’s view. You might think this should be 12 things or 20 things. 10 things is all that matters. 10 things, by the way, is enough to remember.