Weekend roundup: The Bank of Mum and Dad

He calls it “The Bank of Mum and Dad”. And it’s a family story being played out all over Australia. Except the “He” in this story is the Head of Treasury John Fraser.

He told a senate estimates hearing: “I talk with people my age, and the Bank of Mum and Dad is becoming more and more prevalent. It has impacts on superannuation, where superannuation is going to, it has impacts on why people ae saving in their older years, to fund their children’s housing needs. And not just purchase, but often rents.”
 

Boom and gloom

It wouldn’t be the weekend without another warning about our overheated property market. This time it is Morgan Stanley saying the boom has passed its peak, with a looming apartment glut set to trigger a sharp slowdown in future property developments.

“We believe the growth contribution from the housing boom has already peaked and look for a plateau over 2017 and decline through 2018,” the analysts told Fairfax Media.

The housing industry is also facing a “more imminent credit crunch” for purchases and developments, they said.

“The greatest vulnerability is settlement risk on the 160,000 apartments we forecast being completed through the end of 2017,” they said in the report.
 

Make a deal

There was some good housing news, however. Our property column today points out the good news about rental markets opening out and allowing for deals. According to research released by rent.com.au, apartment building has meant tenants in some parts of the country are now able to negotiate down rents.

But not everywhere. In Sydney, people are still doing it tough and battling high prices.

Switch and save

The mortgage price war is winning homebuyers lucrative dividends of up to 1.5 per cent off standard variable interest rates, according to The Sydney Morning Herald.According to researchers at JPMorgan and Digital Finance Analytics, customers have learned that switching banks can deliver big savings. Customers are refinancing while older home owners are doing so to help children buy a property.

Women more stressed by finances

One in four Australian workers feel financial stress, according to a national study of 2,000 Australians by Kantar TNS. Triggers for financial stress are bad debt (50 per cent), the need to make retirement savings (35 per cent) and providing for families (34 per cent).

Women (30 per cent) feel more stressed than men (19 per cent). And those in Brisbane (30 per cent) are the most financially stressed, while those in Melbourne (19 per cent) are the least.

SmartInvestor, The Financial Review’s magazine for the seriously rich, is backing gold as the biggest rally of the year. It’s cover picture is three lip-smacking pieces of bullion, presumably to get it’s readers drooling.

Inside, five experts give their picks of stocks to dump: Montgomery investments are down on banks; MTIS Financial Services don’t like large caps; market analyst Angus Nicholson recommends caution on AGL and Telstra; Bennelong doesn’t like AMP or QBE, while Koda Capital another out of love with the banks.

And finally…a stock to reach a new high

Medical cannabis company Creso Pharma listed on the Australian Securities exchange on Thursday. According to the Financial Review, Investors rushed into the new “pot stock”, sending it to highs of 14 per cent above its 20 cent listing price, rounding out the company’s $11.5 million market capitalisation.

“We are undoubtedly in the middle of a green rush in Australia as broader awareness of the medical benefits of cannabis has combined with forward thinking regulators and governments who have this year created the market structures enabling the industry to flourish,” chief executive Dr Miri Halperin Wernli told The Fin.

The float came a week after the government legalized medical cannabis for patients with life threatening diseases.