You know the increasing wages, should, um that's complicated to explain. Hello and welcome
to our second video following the roundup of the economy in 2019. This is our forecast
for the Australian economy in 2020. We asked our panel of 40 leading experts and economists
in Australia, how likely or unlikely they think 12 different scenarios are to happen
in the next year. We're looking at everything from the housing market to jobs to the Australian
dollar to the economy. In this video, we will round up our forecast for the year 2020. First
up is the housing market. We asked economists whether they expect the pretty dramatic house
price increases we've seen towards the end of 2019, if they expect those to increase
and continue through 2020 or if they expect this is a dead cat bounce of this is a blip
on the graph? House prices of currency collapse back next year. In other words, we asked them
if the highest price increases are stainable? 52% of economists told us that they think
it's likely that house prices will increase to beyond where they were in 2019 in 2020.
More interestingly that when we asked economists how likely it is that prices will fall, then
only 12% of economists told us that it was likely house prices will fall in 2020. So
the general forecast from economist is positive when it comes to house prices, whether that
will actually happen, where we need to watch this space. Well, we also ask them about mortgage
defaults. And this is when people can't pay back their home loan and have to get into
trouble with the bank. We've seen a slight increase in the percentage of Australians
facing mortgage defaults in 2019. We asked economists how likely it is that that's going
to increase again in 2020. And 78% said it was unlikely so we're looking at a comfortable
enough year for Australian borrowers. The second thing we looked at the housing market
was the federal government's new plan to make it easier for first time buyers to get on
the housing ladder basis. If you're buying for the first time you normally need a 20%
deposit, but the federal government as part of the election, promised have introduced
a scheme to get first homebuyers on the ladder with only a 5% deposit. Now that should lead
to more borrowers in the market. You would think that would have an impact on the market,
but maybe not so much we asked economists do they think this will have any significant
impact on the market? 90% of them said they did not expect it to really have any impact
at all. Now, one of the big reasons here is the borrowing limits the government is putting
on the availability of the loans to consumers. For example, in Sydney, you cannot buy a house
for more than 700 K to qualify for these 5% borrowing loans. Now as you know, in Sydney,
you can barely get a parking space for that in many areas. And we have a table on the
screen here we'll just show you the limits you can borrow in various different cities
and states across the country. As you can see they're quite low, so not many people
are going to qualify for this scheme. Finally, we asked economists where they would invest
their money if they had to buy a house in any of the capital cities in Australia. Where
would they invest the money in 2020, Brisbane and Melbourne came out on top, Sydney place
relatively low, which is usually the star of the Australian housing market. So you know,
that was where economists would place their money. If you're going to invest, you might
need to consider those cities watch this space to see how those prices grow. And if they
do. We have seen the employment figures in Australia the jobs figures full over the last
while and it's not looking too good there. When we asked economists how likely it is
that the employment figures will continue to fall, 64% of them told us that it is likely
we will continue to see them fall. In jobs, we've also seen wage growth slowing in 2019.
So the amount of money people get paid is increasing at a slower rate. We asked economists
whether that will continue to drop in 2020. And they said no, 70% of economists around
that said that wage growth will not continue to slow next year. So if that's true, you
know, the majority of Australians could be looking at slightly more money in their pay
packet. Well, we also ask them about retail. Now we've seen a very difficult year for retailers
in Australia we've seen some large, higher end retailers struggling we've seen a big
shift online, a big shift to overseas purchasing to with people like Amazon launching in the
Australian marketing and sucking up that online customer. Well, we asked economist if new
car sales are going to fall in Australia, these are generally a good barometer of a
healthy economy. They fall in recently, but it was bit 50-50. In terms of weather economists
When it comes to the Aussie dollar, well, it's been dropping in value of light and that's
going to continue when we asked economists whether the Aussie dollar will continue to
drop in value in 2020, 80% of them said they do expect it to continue to decline. So that
means less value for Australians travelling overseas, maybe you want to have your holiday
at home, put more money in the Australian economy. Second thing we're looking at here
is quantitative easing, which are called QE, because quantitative easing is pretty difficult
to say. This is basically what central banks do when they run out of options, and aren't
getting any results and boost in the economy from causing cash rates like the idea has
been doing when this happens. And option that's open to banks, which we've seen happen in
the US and in the EU is called QE, where they basically print money and pump it into the
economy in order to stimulate the economy, then withdraw that money further down the
line. Now we've been asking economists how likely it is we'll see QE in 2020. And the
number of economists saying it's likely has gone up and up and up. Now it's about half
of economists that could very well the on the cards. One of the other ways we could
go instead of introducing QE is to go to a zero percent. Contract currently contract
all the way down to zero. That will be three more cuts on top of the three we've seen,
but economists think that only be 73% of them are saying they do not expect to see a zero
percent cash rate next year. This is kind of backed up by the RBA who've also indicated
they don't favour cash, right? And they would probably favour or QE if it did get to that.
And finally, we're gonna look at the big one. How likely is a recession in Australia in
2020? We've done two videos on this looking at the arguments for and against a recession
happening at 2020 links to those in the description. But when we asked economists the results were
strongly against the likelihood of recession, only 9% of economists said they expected a
recession was likely in 2020. Interestingly, when we asked the public so we've got 40 economists
we also surveyed 7000 Australians, half of them think that a recession is likely. If
you looked at the videos we produced the video with the argument for recession has many more
views of the video against so this definitely appetite for recession among the public but
not among the people in the know. So that's our roundup of 2020. Lots of links in the
description more information on those. You can follow my insights blog on finder for
more info on the economy in 2020. Stay with us next year to find out how we go on this
rollercoaster ride. If you're interested in getting involved with the conversation, tell
us what your forecast is for 2020. What do you expect to see in the Australian economy
next year? Comments below we'll see if we can get a conversation going