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Anz predicts the reserve bank of australia will drop interest rates




ANZ has broken ranks with its major rivals to predict that stubbornly high unemployment will force the Reserve Bank to cut its benchmark interest rate by half a percentage point to a new low of 1.5 per cent.

ANZs economists had previously been in agreement with those at Commonwealth Bank and Westpac in expecting rates to stay on hold, albeit with some downside risk, as economic growth gradually accelerates.

But they now expect growth to be too slow reduce spare capacity in the economy.

Pinpointing the timing of the cuts is tricky, but we are pencilling in 25 basis points cuts in February and May at this stage, ANZ economists Warren Hogan and Justin Fabo said in a research note on Thursday.

Thats partly because of a lowered forecast for global economic growth and an expectation that the boost to the domestic economy from housing construction and the lower dollar will wane.

With this backdrop, it is difficult to see how inroads can be made into an elevated unemployment rate, they said.

Even if the unemployment rate is unchanged from its current level of 6.2 per cent for the coming two years that would be very uncomfortable for the central bank.

The jobless rate is more likely to worsen than improve, the ANZ economists said.

The economic backdrop we have outlined above points to greater risk that unemployment worsens rather than improves over the next 12-24 months. If the RBAs governor Glenn Stevens goes down the path of least regret, he will need to cut rates again, they said.

CBA, Westpac and NAB were unmoved in their view that rates would remain on hold.

NAB senior economist David de Garis even said an increase at the end of 2016 was more likely than a cut, but CBA and Westpac still see risk on the downside.

Undoubtedly there is a risk here that Chinas growth may turn out to be a lot weaker than expected but, in terms of the supposed domestic settings, they do remain extremely stimulatory, CBA senior economist Michael Workman said.

And a currency near 70 US cents is much more beneficial than one near 80 US cents. St George senior economist Hans Kunnen concurred, stressing that the impact of the lower Aussie dollar had yet to be fully felt. Its not a sugar hit, it's a slow burn, Mr Kunnen said.

A mixture of the current low interest rate, a weaker currency, stabilisation in China and ongoing growth in the United States should provide a decent backdrop for, not spectacular growth, but reasonable growth in 2016 that doesnt warrant lower interest rates.

Are hitech sleep pods the future of housing




FEEL like your home isn’t big enough? Just be glad you’re not living in Hong Kong.

While the countrys richest may live in mansions with glamorous views of city skylines, the conditions suffered by those on the other end of the spectrum will make your cramped little studio apartment sound like a palace.

Hong Kongs poorest typically live in subdivided apartments or tiny coffin homes nicknamed for their size and the sense of claustrophobia they produce.

Ventilation is typically poor, beds are basically just cages stacked on top of each other and hygiene is almost non-existent.

For some, their entire living space bathroom, kitchen and bedroom combined is in a cramped space as tiny as 1.3 square metres.

Youre literally cooking above your toilet, and swapping out a mattress for bamboo mats or old linoleum is the only way to keep bed bugs away.

Now, one entrepreneur is making hundreds of thousands of dollars in profit each month with an innovative new solution.

HOW BAD IS THE RENTING LIFE IN HONG KONG?

Hong Kong is notorious for its ridiculously high property prices.

According to the latest annual Demographia International Housing Affordability Survey, the country gets the top gong for most expensive housing market in the world.

The median home costs 19 times the median annual pre-tax household income, making it the highest multiple Demographia has measured in 12 years of conducting the survey.

The astronomical prices combined with long public housing queues have forced people into low-income housing, including coffin homes and subdivided units.

According to the countrys Census and Statistics Department, up to 200,000 people were cramped into 88,000 subdivided units last year not including those living illegally in industrial buildings.

When we say subdivided units, were not talking about your average two-bedroom apartment.

In Hong Kong, a subdivided flat involves dividing the originally-approved apartment plan into multiple sections. This entails removing the non-structural partition walls, and can greatly compromise the safety and hygiene of the building.

These living spaces have been referred to as human flesh steamers due to the lack of windows or ventilation, and poor drainage systems.

According to the South China Morning Post, an estimated 100,000 people live in these abhorrent conditions.

While the concept sounds outrageous, it technically falls into a legal grey area due to how difficult it is to gain a warrant to inspect private property.

This means potential safety concerns can eternally go unchecked.

A SOLUTION TO THE PROBLEM

Entrepreneur and landlord Sandy Wong is reeling in thousands of dollars a month by making housing more affordable for Hong Kongs people.

Taking Japans capsule hotel concept to the next level, hes created a series of single-sized bed sleeping quarters which are fashioned into futuristic hi-tech pods, complete with keycard access, airconditioning and blue lighting.

Think of them as alien bunk beds, if you will.

Over the past three months, Mr Wong has rented out 51 pods in six different apartments across the city. He plans to rent out 1000 more units over the following year.

Up to 10 capsules can fit into a typical 65 square-metre apartment.

The capsule homes are about two metres long and 1.1 metres high. They come with a mattress, pillow, bedding, three different lights, outlets for charging devices and a mini fire extinguisher.

They come with a shared kitchen, bathroom and common area.

Mr Wong said his initial price was $HK2500 per month ($A420), but people online were questioning why it was so low. With the success hes gained over the past few months, Mr Wong has now bumped the price up to $HK4500 ($A756) for a minimum one-month stay, and is making an overall profit of $HK120,000 (more than $A20,000) a month.

Mind you, its still more expensive than many of the coffin homes gaining popularity in Hong Kong, but its still more affordable than a potentially-dangerous subdivided flat.

Mr Wongs typical tenant is single, employed and aged between 20 and 40. Unfortunately, this may not address the problems of those slumming in subdivided flats, who are typically unemployed, on very low incomes or new immigrants.

The capsule homes have been very popular among young people who want a sense of privacy, a comfortable bed, but dont want to pay so much money, he said.

Sydney came second on the Demographia property list, with its income-to-house-price multiple climbing to 12.2 from 9.8 in 2014.

You have to wonder whether well eventually be investing in hi-tech capsules of our own.

Buyers in Hong Kong are snapping up 'Mosquito Apartments' 180-square-foot flats in luxury high-rises. These tiny dwellings are selling for more than $500,000 in some areas.