Breakfast Briefing – Realm Investment House
The Planning Room held a breakfast Seminar on Tuesday 27th February at The Public in Cammeray.
We have received so many questions around Bitcoin and crypto currencies, that we decided we should enlist an expert to explain. We also wanted to tie in an update on the banks, the economy and property markets.
With our busy lives, we decided to hold the seminar early and provide breakfast. The response was overwhelmingly positive, with 100% of attendees stating the time and the venue scored 10/10!
The theme was The Age of Disruption and we enlisted Andrew Papageorgiou, co-managing partner at Realm Investment House to present. We are always impressed by their knowledge and understanding of markets and we knew our client’s would be too.
Bitcoin & Blockchain
Andrew started with an explanation of technology (blockchain) that enables crypto currencies, like Bitcoin to operate. He felt that, while Bitcoin itself may not necessarily last, blockchain technology was an important breakthrough and would be used in many more applications in the future.
He noted the best chance for Bitcoin to flourish was in times of financial turmoil, when confidence in Central Banks and more traditional financial markets was low. Failing this, Bitcoin was too volatile and unpredictable to be used widely as a store of value. It would only appeal to true believers, speculators and those trying to avoid the scrutiny of more traditional currencies.
It was very interesting and informative and the feedback to Andrew’s session was fantastic!
Andrew spoke about Australia’s banking system and how profitable the big banks have been compared to their international peers. This was largely due to the market dominance of CBA, ANZ, NAB and Westpac. Interestingly, the sector has become even more concentrated since the GFC.
There have been some recent regulatory pressures, which had resulted in the banks holding more capital and slowing down investor lending. However, the biggest disruption may come from ACCC investigation. With a mandate to promote competition, this could result in big changes, potentially reducing market concentration and profitability.
Technology, such as the blockchain, will initially benefit the banks by bringing down cost and increasing efficiencies. However, this could lead to significant disruption to the sector once it really takes hold.
Andrew finished his session with an outlook for the broader Australian property market. He believes that the regulators efforts to cool the market had been a success. Potential changes to negative gearing and capital gains tax could also have a negative impact in the short term.
However, there are strong structural factors underpinning the housing market over the medium to long term. Persistent high immigration will continue to see strong housing demand. Sharing a time zone and proximity to the fastest growing nations on earth will mean that people will continue to pay higher prices to live in Sydney and Melbourne.
Andrew, whilst he sees some rocky times ahead, was mainly upbeat for the longer term outlook. He feels that so long as people have good advice and coaching to back them up, they should be okay.
We would like to thank Andrew and the team at Realm for the excellent presentation.