Bearish divergence, bigger number not always better for housing
Full disclosure I got Ai to compose this because I'm dyslexic and a scatter brain.
and this is a duplicate because I tried to delete it once I found out it scaled bad on mobile, and trading views delete function MIA! ( within the cool down ) go figure.
I definitely have a bias to btc and maybe a long position on the JPY. Have a read have a look.
I have loosely marked some economic data on here showing Policy might not be working well enough because wages didn't keep up with CPI causing a real value losses after 2022.
I have supplied the ratio chart for gold as a indicator at the top.
Structural Policy Drivers (The Cause of the Bull Trend)
These points explain why the long-term trend line (the logarithmic regression) slopes upward:
1. The Foundation of Investment (1999): The introduction of the 50% Capital Gains Tax (CGT) Discount in September 1999 was the single most powerful structural stimulus. It transformed property investment (combined with Negative Gearing) into the primary wealth-creation strategy, ensuring sustained investor demand.
2. GFC Policy Proof (2008-2009): The market's low point during the GFC was immediately arrested by the First Home Owners Boost (FHOB) and broad cash payments (October 2008). This showed that the government would deploy massive, rapid stimulus to prevent a structural price fall, reinforcing investor confidence.
3. The Liquidity Flood (March 2020): The RBA's emergency COVID Rate Cuts and Quantitative Easing (QE) injected unprecedented liquidity, creating the conditions for the most recent Nominal Higher High.
II. The Bearish Divergence Signal (The Warning)
These points explain why the recent peak is weak and unsustainable:
4. Technical Exhaustion: The Bearish Divergence observed between the Nominal HPI Price (making a \text{Higher High} in 2022) and the RSI/Momentum (making a \text{Lower High}) signals that the momentum required to sustain the uptrend is exhausted.
5. The Illusion of Value: The Nominal Higher High is highly misleading. When adjusted:
Purchasing Value: The Price-to-Income Ratio reached a \text{record high} (\sim 8.0 times income), meaning the price peak was actually a Lower Low in affordability.
Real Value: When measured in Ounces of Gold, the HPI peaked at a massive Lower Low (\sim 206 ounces in 2024 vs. \sim 874 ounces in 2004), demonstrating the fragility of AUD-denominated property wealth.
III. The Policy Constraint (The System Strain)
These points explain the high risk and fragility of the current market:
6. Diminishing Returns: The market required the extreme, combined stimulus of near-zero rates (RBA) and low-deposit guarantees (5% FHB schemes}) to reach its 2022 peak. The Bearish Divergence confirms this level of effort produced a historically weak momentum result, indicating policy inefficiency.
7. The Investor Exit Trigger: The current high interest rates and the {Lower Low in Purchasing Value} are highly likely to encourage a rotation of capital. A sell-off of just 5\% of investment equity (\approx \$104 Billion) could overwhelm {FHB} demand and force a Nominal Price Correction a {Lower Low}) by late 2026 / mid-2027.
8. The "Double Whammy" Risk: Recent low-deposit buyers face extreme risk: their equity is thin (vulnerable to price drops) while their debt servicing remains stretched, as large wage increases are structurally unlikely (due to the RBA's mandate to curb inflation).
🛑 INVESTMENT PROPERTY HEDGE: The Exit Strategy
This strategy is for owners of non-owner-occupied property facing the convergence of the {AU} Housing {Bearish Divergence} and the Global {JPY} Unwind.
✅ Core Hedges: Replacing Inefficient Investment Equity
The goal is to move capital from a low-momentum, illiquid, highly-taxed, AUD-denominated asset (investment property) into a high-liquidity, real-value store.
1. Physical Gold & Silver (The Devaluation Defense):
WHY: Gold is the essential hedge against the currency risk. Our analysis shows that your property's value has collapsed when measured in Gold {Lower Low} on the {House Price-to-Gold Ratio}). Converting illiquid property equity into physical metals protects wealth from the {AUD} devaluation caused by both domestic policy strain and global policy shocks.
Investment Action: This should be prioritized for preserving the real wealth that may be lost if Nominal {QAUR628BIS} corrects.
2. Defensive Japanese Yen {JPY}) Exposure:
WHY: This is the most direct hedge against the global liquidity shock. The {JPY} is the "funding currency" for the global risk trade. When the carry trade unwinds, investors must buy {JPY} to repay their debt, causing a sharp appreciation. This {JPY} strength would directly offset losses incurred by the domestic housing slowdown.
Investment Action: Provides protection against the {2026-2027} global market crash that the {JPY} unwind is predicted to trigger.
3. Bitcoin (The Non-Sovereign Liquidity Drain):
WHY: Bitcoin provides the fastest, most tax-efficient (long-term {CGT} relief applies) exit route for capital leaving a strained domestic financial system. It is the perfect liquid asset to absorb the {\$104B} of equity that a 5\% investor sell-off would create.
Investment Action: A strategic allocation here hedges against both {AUD} devaluation and the systemic policy risks you've identified.
❌ Liabilities to AVOID: The System's Vulnerabilities
1. Australian Bank Stocks {CBA, Westpac, etc.}):
WHY NOT: Their fate is tied to your property's mortgage risk. The {Bearish Divergence} on the (QAUR628BIS) directly increases their credit risk. The {JPY} unwind will also hurt them by disrupting global financial stability and reducing lending capacity. They are a concentrated liability.
2. Leveraged US Stock Indices {S\&P 500/Nasdaq}):
WHY NOT: The {US} market is a primary target of the {JPY} carry trade unwind. Leveraged investors will be forced to sell these high-performing assets to close their debt positions, leading to a non-fundamental, sharp correction. The risk of sudden {JPY}-driven liquidation is too high.
Thanks for reading I made this for my Father who recently had to ( forced hand) purchase another home (above what he lived for "reasons") convinced cash and the property are safe and cannot afford to lose more money.
Leave a comment for him.
Or add to the conversation share your own views.
and this is a duplicate because I tried to delete it once I found out it scaled bad on mobile, and trading views delete function MIA! ( within the cool down ) go figure.
I definitely have a bias to btc and maybe a long position on the JPY. Have a read have a look.
I have loosely marked some economic data on here showing Policy might not be working well enough because wages didn't keep up with CPI causing a real value losses after 2022.
I have supplied the ratio chart for gold as a indicator at the top.
Structural Policy Drivers (The Cause of the Bull Trend)
These points explain why the long-term trend line (the logarithmic regression) slopes upward:
1. The Foundation of Investment (1999): The introduction of the 50% Capital Gains Tax (CGT) Discount in September 1999 was the single most powerful structural stimulus. It transformed property investment (combined with Negative Gearing) into the primary wealth-creation strategy, ensuring sustained investor demand.
2. GFC Policy Proof (2008-2009): The market's low point during the GFC was immediately arrested by the First Home Owners Boost (FHOB) and broad cash payments (October 2008). This showed that the government would deploy massive, rapid stimulus to prevent a structural price fall, reinforcing investor confidence.
3. The Liquidity Flood (March 2020): The RBA's emergency COVID Rate Cuts and Quantitative Easing (QE) injected unprecedented liquidity, creating the conditions for the most recent Nominal Higher High.
II. The Bearish Divergence Signal (The Warning)
These points explain why the recent peak is weak and unsustainable:
4. Technical Exhaustion: The Bearish Divergence observed between the Nominal HPI Price (making a \text{Higher High} in 2022) and the RSI/Momentum (making a \text{Lower High}) signals that the momentum required to sustain the uptrend is exhausted.
5. The Illusion of Value: The Nominal Higher High is highly misleading. When adjusted:
Purchasing Value: The Price-to-Income Ratio reached a \text{record high} (\sim 8.0 times income), meaning the price peak was actually a Lower Low in affordability.
Real Value: When measured in Ounces of Gold, the HPI peaked at a massive Lower Low (\sim 206 ounces in 2024 vs. \sim 874 ounces in 2004), demonstrating the fragility of AUD-denominated property wealth.
III. The Policy Constraint (The System Strain)
These points explain the high risk and fragility of the current market:
6. Diminishing Returns: The market required the extreme, combined stimulus of near-zero rates (RBA) and low-deposit guarantees (5% FHB schemes}) to reach its 2022 peak. The Bearish Divergence confirms this level of effort produced a historically weak momentum result, indicating policy inefficiency.
7. The Investor Exit Trigger: The current high interest rates and the {Lower Low in Purchasing Value} are highly likely to encourage a rotation of capital. A sell-off of just 5\% of investment equity (\approx \$104 Billion) could overwhelm {FHB} demand and force a Nominal Price Correction a {Lower Low}) by late 2026 / mid-2027.
8. The "Double Whammy" Risk: Recent low-deposit buyers face extreme risk: their equity is thin (vulnerable to price drops) while their debt servicing remains stretched, as large wage increases are structurally unlikely (due to the RBA's mandate to curb inflation).
🛑 INVESTMENT PROPERTY HEDGE: The Exit Strategy
This strategy is for owners of non-owner-occupied property facing the convergence of the {AU} Housing {Bearish Divergence} and the Global {JPY} Unwind.
✅ Core Hedges: Replacing Inefficient Investment Equity
The goal is to move capital from a low-momentum, illiquid, highly-taxed, AUD-denominated asset (investment property) into a high-liquidity, real-value store.
1. Physical Gold & Silver (The Devaluation Defense):
WHY: Gold is the essential hedge against the currency risk. Our analysis shows that your property's value has collapsed when measured in Gold {Lower Low} on the {House Price-to-Gold Ratio}). Converting illiquid property equity into physical metals protects wealth from the {AUD} devaluation caused by both domestic policy strain and global policy shocks.
Investment Action: This should be prioritized for preserving the real wealth that may be lost if Nominal {QAUR628BIS} corrects.
2. Defensive Japanese Yen {JPY}) Exposure:
WHY: This is the most direct hedge against the global liquidity shock. The {JPY} is the "funding currency" for the global risk trade. When the carry trade unwinds, investors must buy {JPY} to repay their debt, causing a sharp appreciation. This {JPY} strength would directly offset losses incurred by the domestic housing slowdown.
Investment Action: Provides protection against the {2026-2027} global market crash that the {JPY} unwind is predicted to trigger.
3. Bitcoin (The Non-Sovereign Liquidity Drain):
WHY: Bitcoin provides the fastest, most tax-efficient (long-term {CGT} relief applies) exit route for capital leaving a strained domestic financial system. It is the perfect liquid asset to absorb the {\$104B} of equity that a 5\% investor sell-off would create.
Investment Action: A strategic allocation here hedges against both {AUD} devaluation and the systemic policy risks you've identified.
❌ Liabilities to AVOID: The System's Vulnerabilities
1. Australian Bank Stocks {CBA, Westpac, etc.}):
WHY NOT: Their fate is tied to your property's mortgage risk. The {Bearish Divergence} on the (QAUR628BIS) directly increases their credit risk. The {JPY} unwind will also hurt them by disrupting global financial stability and reducing lending capacity. They are a concentrated liability.
2. Leveraged US Stock Indices {S\&P 500/Nasdaq}):
WHY NOT: The {US} market is a primary target of the {JPY} carry trade unwind. Leveraged investors will be forced to sell these high-performing assets to close their debt positions, leading to a non-fundamental, sharp correction. The risk of sudden {JPY}-driven liquidation is too high.
Thanks for reading I made this for my Father who recently had to ( forced hand) purchase another home (above what he lived for "reasons") convinced cash and the property are safe and cannot afford to lose more money.
Leave a comment for him.
Or add to the conversation share your own views.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.