Latest news with #AlanOster
Daily Mail
11 hours ago
- Business
- Daily Mail
NAB boss slammed for 'peak boomer' advice for building wealth as everyday Aussies battle a housing crisis
The long-serving former chief economist of one of Australia's big banks has come under fire for comments widely criticised as tone-deaf and out of touch. Alan Oster, who retired in March after 32 years with NAB, shared his views on building wealth in a recent interview with the Australian Financial Review. His advice? Invest in property and wait. 'Buy a good property and hold it, is basically the bottom line,' he told the publication. 'We've still got some property down in Portsea and we tend not to sell under normally about 15–20 years.' But his comments sparked immediate backlash. 'This is funny because Oster [thinks] this is helpful... advice but it's effectively a Paris Hilton singlet saying 'don't be poor',' wrote journalist Mark Di Stefano on X. Di Stefano jokingly referenced the infamous doctored image of Paris Hilton, where her shirt was edited to read 'Stop being poor', and subsequently went viral. In reality, the shirt originally said 'Stop being desperate'. Oster's remarks follow the reported sale of his five-bedroom home in Melbourne's affluent suburb of Brighton. The property was said to have fetched around $5.5million, reportedly roughly double its 2012 purchase price. Oster told that the reported figure was inaccurate, though he did not provide an alternative price. According to the current median house price in Brighton is just over $3million. Alex Joiner, Chief Economist at IFM Investors, described Oster's remarks as a 'misstep,' saying they highlighted a disconnect from reality for first-home buyers. 'People struggling to buy a home won't like to be told by a Brighton resident how to get a home,' Joiner said. He added that Oster had benefited from 'structurally lower interest rates, financial deregulation, multiple enormous property booms, and discounted rates and fees from his employer'. Olster recently sold a home in Brighton (pictured) - one of Melbourne's most exclusive areas Cameron Kusher, Director of Economic Research at Real Estate Australia, also criticised the piece, saying, 'It wasn't a great read'. 'Most people could only dream of owning a Brighton home. Most buy at much lower prices in much worse locations, and prices haven't risen like they have in Brighton.' Other readers were less forgiving. 'It's an indictment on this country when the long-serving chief economist of a major bank is reduced to recommending buying luxury property rather than offering any critical analysis,' one wrote. 'Wow, can really see why he was a chief economist. "Buy a good property and hold it",' one person wrote sarcastically. 'Thank goodness there's no housing crisis in Australia and properties are generally affordable, or this article would be pure tumbrel remark,' another commented. 'Peak boomer,' someone else simply replied. The comments come just weeks after a global housing study ranked five major Australian cities among the 20 least affordable in the world. Sydney was ranked the second most unaffordable city globally, behind only Hong Kong. Adelaide came in 6th, Melbourne 9th, Brisbane 11th, and Perth 18th.
News.com.au
a day ago
- Business
- News.com.au
NAB's former chief economist defends ‘buy a good property' tip following backlash
A comment by NAB's former chief economist has been criticised for being out-of-touch, but Alan Oster disagrees that his wealth generating strategy is only for people who are already rich. Mr Oster, who retired from the bank as chief economist in March after 32 years in the role, was quoted in the Australian Financial Review as saying: 'Buy a good property and hold it, is basically the bottom line'. He said he tended not to sell under about 15 to 20 years. Mr Oster's comments followed the sale of his five-bedroom home in Melbourne's affluent suburb Brighton, which was said to sell for about double the 2012 purchase price at $5.5 million, but Mr Oster tells that figure is incorrect. He did not disclose a different price. Alex Joiner, chief economist at IFM Investors, described the advice as 'a misstep'. 'People struggling to afford a home likely don't want to be told by a Brighton resident (and owner of Portsea property as noted in the article) who has had a very high income for many many decades, the benefit of structurally lower interest rates, financial deregulation, multiple enormous property booms and discounted rates and fees from his employer what they have to do to get themselves a home,' Mr Joiner wrote on X. Property research analyst Cameron Kusher, who was the REA Group's executive manager of economic research until this year, also took aim at the advice. 'Most people could only dream of owning a Brighton home,' he said. 'Most people buy at much lower prices in much worse locations and prices have not risen like they have in Brighton. 'The fact that a long-term chief economist's advice is buy a good property and hold it kind of highlights what is wrong with Australia's mindset and how we view building wealth. 'His advice hasn't been wrong for a lot of people over recent decades but that doesn't mean it will be correct going forward and doesn't really mean financialising sheltering what we should have done.' The Australian Financial Review 's Rear Window editor Mark Di Stefano compared Mr Oster's comment to a famous meme of Paris Hilton wearing a singlet that says 'Stop Being Poor'. (Hilton's actual shirt read 'Stop Being Desperate' but the edited version is much more well known). Mr Oster told he was not giving financial advice but had shared his own 'philosophy', which he had used for the last 40 to 50 years. He described his approach to housing as a ten-year proposition and argued that buying now or in six months time was actually irrelevant. 'Buy, if you can, better quality,' Mr Oster said. 'Do your homework, get your building report, you don't have to do renovations straight away, but over time you can and don't be rushed. 'There is an element of 'you buy worst house in best street'; I think that's still true, and you sit around over a long period and do it up the best you can.' He added: 'Look for the best structure.' As for whether it is a wealth-building strategy only possible for a small percentage of Australians, Mr Oster disagrees. 'When I started out, I didn't have any money,' he said. 'And that's sort of what I've done all my life. I try and buy the best house I could afford and keep it and do a bit of renovation on it, and gradually through time that's helped.' Mr Oster told he 'started at the very bottom'. 'I grew up in Newcastle, which was not a wealthy area and then I went off into Federal Treasury in Canberra and was a real struggle to survive,' he said. The first property Mr Oster bought was in Canberra with the help of his parents in the early 1980s. He said it was 'very, very cheap,' being a 'crappy house' in a reasonable area. He ended up selling that property to move to Paris, but said he applied his strategy of holding on to property for at least a decade in the years after he returned to Australia. Mr Oster predicts Australians will see a cash rate around 3 per cent late this year or early next year. However, he doesn't expect a rate cut at the next RBA meeting in July. 'Count on three more rate cuts, provided the world doesn't blow up, but three more rates cuts is something you could factor in and then after that I think probably rates will hold for a while,' he said. The official cash rate in Australia is currently 3.85 per cent after a 25-basis point cut in May.
Reuters
11-03-2025
- Business
- Reuters
Australia business confidence falls in February despite interest rate relief, survey says
SYDNEY, March 11 (Reuters) - A measure of Australian business confidence fell back into negative territory in February despite some interest rate relief from the central bank, a survey showed on Tuesday, highlighting challenges in the business sector. The survey from National Australia Bank (NAB) showed its index of business conditions edged up 1 point to +4 in February, but remained below long-run averages. The confidence index fell a sharp 6 points to -1, offsetting a gain in the previous month. "The lift in confidence seen (in January) was not sustained into February and is now well below average again," said Alan Oster, chief economist at NAB. "This was despite the improvement seen in Q4 GDP data and the RBA's first rate cut, which suggests that businesses continue to be cautious about the outlook." The Reserve Bank of Australia last month cut rates by a quarter-point to 4.1%, having held them steady for over a year. However, policymakers still warned that prospects of further easing are not guaranteed. Swaps imply a scant chance that the RBA will follow up with another cut in April, but a move in May is about 80% priced in. Rates are seen reaching 3.5% by the end of the year. The survey's sub-index for sales edged up 1 point to +4, while profitability also rose 1 point to -1. The employment index fell 1 point to +4, while forward orders were steady at -3. The NAB survey showed there are still some price pressures, with purchase costs up 1.5% in quarterly term, accelerating from 1.1% previously. Retail price inflation was unchanged at a quarterly pace of 1%. "Lingering cost pressures continue to put pressure on business profits, with profitability conditions remaining well below the long-run average. This is likely flowing through to weaker conditions and confidence measures," said Oster from NAB.
Yahoo
12-02-2025
- Business
- Yahoo
Australia business confidence improves even as conditions slacken, survey says
SYDNEY (Reuters) - A measure of Australian business activity eased in January as sales and profits softened, a survey showed on Tuesday, though confidence got a boost amid hopes for a near-term reduction in borrowing costs. The survey from National Australia Bank (NAB) showed its index of business conditions fell 3 points to +6 in January, reversing gains made the previous month. The volatile confidence index bounced to +4, from -2, the highest reading since October. The index of sales fell 4 points to +6, while profitability slid 6 points to -2 pointing to pressure on profit margins, particularly in the retail sector. "Cost pressures remain elevated for businesses and are not being fully passed onto consumers, which may be weighing on profitability and therefore overall business conditions," said Alan Oster, chief economist at NAB. On the brighter side, the employment index added 1 point to a relatively healthy +5, continuing the outperformance of the labour market. Conditions worsened in the mining, finance and property sectors, while retail fell back after an upbeat December. There could be some relief ahead for firms and consumers as markets are wagering heavily the Reserve Bank of Australia will cut its 4.35% cash rate next week to reflect a marked slowdown in inflation. It would be the first cut since the depths of the pandemic in 2020. The NAB survey had mixed news on inflation, with labour costs rising to a quarterly pace of 1.8% in January while growth in purchase costs slowed to 1.1%. Retail prices rose at a quarterly pace of 0.9%, up from 0.7% in December. The capacity utilisation rate dropped to 82.0%, from 82.7%, suggesting there was a little more slack in the economy.
Yahoo
11-02-2025
- Business
- Yahoo
Australia business confidence improves even as conditions slacken, survey says
SYDNEY (Reuters) - A measure of Australian business activity eased in January as sales and profits softened, a survey showed on Tuesday, though confidence got a boost amid hopes for a near-term reduction in borrowing costs. The survey from National Australia Bank (NAB) showed its index of business conditions fell 3 points to +6 in January, reversing gains made the previous month. The volatile confidence index bounced to +4, from -2, the highest reading since October. The index of sales fell 4 points to +6, while profitability slid 6 points to -2 pointing to pressure on profit margins, particularly in the retail sector. "Cost pressures remain elevated for businesses and are not being fully passed onto consumers, which may be weighing on profitability and therefore overall business conditions," said Alan Oster, chief economist at NAB. On the brighter side, the employment index added 1 point to a relatively healthy +5, continuing the outperformance of the labour market. Conditions worsened in the mining, finance and property sectors, while retail fell back after an upbeat December. There could be some relief ahead for firms and consumers as markets are wagering heavily the Reserve Bank of Australia will cut its 4.35% cash rate next week to reflect a marked slowdown in inflation. It would be the first cut since the depths of the pandemic in 2020. The NAB survey had mixed news on inflation, with labour costs rising to a quarterly pace of 1.8% in January while growth in purchase costs slowed to 1.1%. Retail prices rose at a quarterly pace of 0.9%, up from 0.7% in December. The capacity utilisation rate dropped to 82.0%, from 82.7%, suggesting there was a little more slack in the economy. Sign in to access your portfolio
