John Linton .....where things are just too tough to continue?
Times are tough all over according to people I have talked with over the past week or have a close second hand appraisal of other circumstances. The three major inputs for expressing that view have all been fact based in key areas of the NSW economy.
My youngest daughter, after five years of a steady if unexciting job with IBM, bought a unit last week prior to its auction date and for less than the agent had said would be required. After she had been looking around (with avid support from her mother) it had become apparent to her that few if any of the asking prices of properties were being achieved and while no real estate in Sydney can ever be described as "cheap" the prices were at least becoming more reasonable since she bought her first 'shoe box' for what seemed to an unknowledgeable person like me to be an extraordinary large amount of money - but that was back in the days of the first home buyers grant whch was causing real estate price inflation at the bottom end of the market.
The second 'fact' was the pricing for new cars. Both Annette and I have had our cars for years longer than has been a lifetime habit of keeping such things and have been looking at trading them in on a very disinterested basis over the past year or so - never seeing any point in using up good money to replace cars that were continuing to do a more than adequate job despite their advancing years. A few weekends ago we decided that 8 year old cars driven almost exclusively in woeful traffic conditions on roads that would be at home in a third world country town were showing more and more signs of requiring expensive 'maintenance' and we should do something sooner rather than later. So, thinking we could probably get a better deal by buying two cars at the same time we visited the brand of our choice and began the painful process of 'negotiating' a "deal". I have always taken the approach that it's easier to simply take 15% off the 'list' price and pay no more than that or, more recently simply go to a broker with the detailed specs and ask for a price that will turn out to be 20% (at least) lower than new car list price. I was surprised that this time the pricing offered by the least preferred of the dealers was around 17% off list with absolutely no 'negotiation'. I will be interested to see what the broker pricing is but it seems to indicate that new car sales are more than a little slow at the moment - if only for this particular manufacturer.
The third 'fact ' was from our bank manager who continues to try and 'sell' us loan funds. During a telephone call last week he effectively said that the bank was experiencing more trouble than in the past year or so with their small business loans in that defaults were growing and the only business loan applications they were receiving were from companies that didn't meet their loan requirements and their current 'good' loan customers only wanted to reduce their loans and weren't interested in borrowing extra money but were reducing their current loans. We couldn't help him because we have never used the loan facilities we already have in place let alone borrow more money.
So three 'concrete' indications that in NSW business conditions are more difficult than they have been albeit from one family's personal experiences. I wonder what the real situation is?
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