7.30 Report does foreign property investment

ScreenHunter_5115 Nov. 24 09.52 By Leith van Onselen ABC's 7.30 Report did a good job covering the parliamentary inquiry's report into foreign investment in Australian real estate, featuring two segments on the issue last night. In the first segment, the show interviewed a number of players in the real estate industry with direct exposure to foreign investors, with real estate agent, Robert Simeon, providing the most damning assessment: "All of a sudden we're seeing this tsunami of overseas money coming in and it's sort of, like, wiping out markets, wiping out market demographics, it's denying people of the opportunity to...
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Mac Bank sees “twin” hit to property prices

fhew Exactly right from Mac Bank today: Negative catalysts continue to circle the domestic property market making for a rather surreal backdrop. The sharpening of FIRB’s ‘teeth’, along with pending curbs on investors and (emerging) curbs on interest-only loans for owner-occupiers are likely to continue to see the market soften. Impact  Kelly O’Dwyer’s Report on Foreign Investment to give FIRB sharper teeth – The much-awaited O’Dwyer report was released today. There will be a national land register that records citizenship, which will be cross-referenced with various Government...
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RIO blinks

url Hmmm, from the SMH: Rio Tinto's rhetoric around shareholder returns appears to be changing, with its promise of "materially increased" shareholder returns replaced by a pledge to deliver "sustainable" cash returns next year. The seemingly toned-down promise came in documents lodged with the ASX on Friday morning, ahead of a major strategy day in Sydney. ...Rio also announced it will defer the commissioning of a new greenfield mine in the Pilbara called Silvergrass, but insists it will achieve the same volume growth in iron ore exports over the same time frame by taking bottlenecks out of the...
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Residex on why boomers are hog wild for housing

ScreenHunter_05 Apr. 15 22.08 By Leith van Onselen Residex has released its dwelling price results for October, which revealed 0.49% growth for houses nationally and 0.15% growth in unit values at the national level. Over the year, there has been a clear slowing of momentum, with house values growing by 6.71% nationally, with unit values up by 6.69% (see next chart). As shown above, there is significant divergence in growth rates across the capital cities and regions, with Sydney (+16.83% YoY houses, 13.99% YoY unites) way out in front of the other capitals, and driving growth nationally, and at the other end of the...
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Macro Morning: Thar oil blows

marketmorning By Chris Becker The major market shaker overnight was obviously the huge play by OPEC to not "interfere" in the energy market, by keeping production on track to shake out the shale producers in the US. This saw an already weak oil price smashed over 6% through its support all the way to $68USD per barrel: Not exactly rocket surgery that sort of trade setup, with a very high risk reward ratio for those of us short already - as the price action dictated - but I'm not sure if there's going to be a short squeeze here as OPEC seems firm on getting it down to $60 or so. Here's nice wrap from Chris...
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OPEC declares oil war on US (and Australia)

A861wWarDeclared_thumb The Aitken oil crash is really warming up now. Here's how the OPEC meeting broke up: Recording its concern over the rapid decline in oil prices in recent months, the Conference concurred that stable oil prices – at a level which did not affect global economic growth but which, at the same time, allowed producers to receive a decent income and to invest to meet future demand – were vital for world economic wellbeing. Accordingly, in the interest of restoring market equilibrium, the Conference decided to maintain the production level of 30.0 mb/d, as was agreed in December 2011. As always, in...
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Daily iron ore price update (Cloudbroken?)

anvil1-200x2001111 Here are the iron ore price charts for November 27, 2014: Relief at last. Paper markets broadly rallied and physical followed. Rebar average is offering support with stable prices for a few days. Whether the dump is over is really besides the point. You simply cannot be bearish enough in this market and I still expect rallies to be brief. Much downside in the next eighteen months remains. In news, RIO is expected to approve more ore today: JPMorgan’s Lyndon Fagan said the key focus of the investor day, attended by divisional heads from iron ore, energy and innovation, would be any...
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WA budget into the pit

broken-promises-logo From News comes no surprise: A day after Premier Colin Barnett conceded a deficit could not be avoided, Treasurer Mike Nahan released the September quarter financial report showing an operating deficit of $347 million for the period. ...But Mr Barnett has flagged a grim mid-year review, which will be handed down next month. He said yesterday that the state’s finances were “not pretty” and foreshadowed higher fees and charges for households. What you need, Comrade Colin, is more iron ore in the West Pilbara to boost your volumes. Oh,...
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Parko departs with bitter message from the pulpit

ScreenHunter_05 May. 21 15.13 By Leith van Onselen Outgoing Secretary of the Australian Treasury, Dr Martin Parkinson, has given his final speech to the Committee for Economic Development of Australia (CEDA), in which he Below are the key extracts. First, Dr Parkinson outlines the conundrum facing the Australian economy, whereby GDP growth will be supported by rapidly rising mineral export volumes, given a reasonable "headline figure", but national income and employment growth will be anaemic due to falling commodity prices (terms-of-trade) and declining mining investment: Australia’s growth over the past decade has...
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RP Data weekly Australian house price update

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen In the week ended 27 November 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.27%.  It was the second consecutive weekly decline (see next chart). Home prices fell in three major capitals and rose in two (see next chart). So far in November, home values have fallen by 0.30%, dragged down by Melbourne and Adelaide (see next chart). Since the start of the year, home values nationally have risen by 7.14%, with all major capitals except Perth rising in value (see next...
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More evidence on why house prices are outpacing credit

ScreenHunter_06 May. 15 16.47 By Leith van Onselen Up until a year ago, I used to report monthly State Government data on housing transfers and mortgage lodgements for Queensland. However, for some reason, the State Government ceased publishing its monthly series and I stopped reporting on the matter. After various Google searches I discovered that Queensland now produces a fortnightly series, dating back to mid-2008, showing the number of housing transfers, mortgage lodgements and mortgage discharges. As shown below, the number of housing transfers and mortgage lodgements (including refinancings) bottomed in...
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Links 28 November 2014

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: OPEC Takes No Action to Ease Supply Glut as Oil Slumps - Bloomberg Causes of the G7 fixed investment doldrums - VOX North America: Top 400 taxpayers paid almost as much in federal income taxes in 2010 as the entire bottom 50% - aei.org US Congress considers host of tax breaks - Financial Times New timelapse the ultimate in Toronto skyline porn - blogto.com The US Census Bureau is cooking the new home sales numbers - HousingWire 24 Hours in Ferguson - Bloomberg Businessweek Europe: Russia’s Banks Feel Capital Squeeze in Grip of Sanctions...
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ASX at the close

ScreenHunter_31 Jun. 04 16.42 Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Equities continue to consolidate recent gains in Asia with some optimism we’ll see further action from key central banks. Global central bank action has been a key theme all year and it seems we’ll finish 2014 in exactly the same way we started. While Fed policy expectation continues to pop up everytime US data shows signs of faltering, the spotlight at the moment certainly seems to be on the ECB and the PBoC. The ECB has been increasingly vocal in recent weeks, as a sombre economic picture has forced it to consider buying...
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Poll: Should pollies disclose negatively geared property?

ScreenHunter_5190 Nov. 27 14.55 There's an online survey running over at Easy Poll asking whether "members of the Australian House of Representatives and Senate should be forced to disclose whether they own a negatively geared property?". The survey comes in the wake of revelations that Australia's federal members of parliament hold a combined $300 million property portfolio, creating clear conflicts in relation to housing policy. Go on, make your views known. The survey can be accessed...
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Brent/LNG crash to four year lows

dfge Markets have conclude that OPEC isn't going to cut and oil is falling out of bed: Taking LNG contract prices with it, now at $11.47mmBtu: $70 looks like the next support level. Energy stocks are getting creamed with BHP down 1.6% at $32, Santos down 3% at $11.62, Origin dropping 3.3% to $13.16, Woodside falling 2.3% at $38.64 and Oil Search down 2.3% at...
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Pascometer wails on foreign property buyers

imgres30 Weeoo, weeoo, weoo. The counter-contrarian signal generator known as The Pascometer is screaming "sell" to foreign property buyers: After all the hearings and submissions, the House of Representatives Economics Committee Report on Foreign Investment in Residential Real Estate boils down to this sentence on page 86: "Conflicting evidence has been received by this inquiry, although on balance it is the committee's view that the benefits of foreign investment outweigh the negatives." ...There is a need for politicians to be seen to be doing something about "barbeque stopper" issues, particularly...
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Chaos overtakes $7 medical co-payment

ScreenHunter_5189 Nov. 27 13.57 By Leith van Onselen Will they or won't they? Confusion is running wild today on whether the Abbott Government will abandon its $7 co-payment on medical visits, with Treasurer Joe Hockey seemingly contradicting Prime Minister Tony Abbott on the issue. Last night and this morning, it seemed as if the $7 co-payment was on the chopping block, with the Canberra Times (and other outlets) reporting the following: Prime Minister Tony Abbott has privately conceded defeat on his controversial budget proposal to introduce a new $7 co-payment on bulk-billed GP visits and will formally shelve the policy...
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Official: China to hit peak steel in 2017

images14 From the AFR: Li Xingchuang, president of the government-linked China Metallurgical Industry Planning Association, said steel consumption would peak at 740 million tonnes in 2017. This is well below the 1 billion tonne forecasts of Rio Tinto, BHP Billiton and Fortescue Metals Group, who all broadly believe Chinese steel consumption will not peak until beyond 2030. “I really don’t understand how the big mining companies made that forecast,” said Mr Li at a Platts steel conference in Shanghai. Group think, my man. To be honest, I reckon this forecast is optimistic. Li sees 1.7%...
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Big cuts to NSW power bills as death spiral looms

fig11.1 From the AFR: NSW power customers will see their power bills fall 10 percent, more than after the scrapping of the carbon tax, thanks to a landmark regulatory decision that reins in “gold plating” at electricity networks. AER chairman Paula Conboy said: “We estimate that our draft decisions, if implemented, would reduce annual electricity bills for a typical residential household living in NSW, on average, by $219 (10 per cent) in 2015–16. The AER decision will force the networks to slash costs to adjust for the slower growth in power demand and lower financing costs. Capital expenditure will...
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Iron ore miners hold up as futures rally

Capture There's life in the old dog yet. Glencore hot air levitated miners this morning with FMG flat, RIO down a bit and BHP down a bit more despite another record price plunge. Here is the comparative index: The idiocy spreads are widening even further with RIO now a minor nation away from good sense, BHP threatening new wides and the moron cross closing in on both: RIO looks wildly overpriced, so say these blokes at Barrons: Axiom analysts Gordon Johnson II and James Bardowski have been bearish on Rio Tinto(RIO) for some time, but today lowered their target price on the stock by $5,...
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ALP dill opposes foreign property buyer regime

ScreenHunter_16 May. 13 15.31 By Leith van Onselen If you want a textbook example of just how useless the federal Australian Labor Party (ALP) has become, look no further than the member for Chifley, Ed Husic, who noted the following in parliament in response to the Parliamentary Committee's eminently sensible recommendations to actually enforce the rules governing the purchasing of pre-existing dwellings by foreigners. From The ABC: The committee's Labor deputy chairman Ed Husic has condemned much of the report as a "new tax grab" on foreign investors, prompted by racially charged media reports. "While some good might have...
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S&P endorses Australian macroprudential

cgn4e6r Fresh from S&P: Australia's strong growth in residential property prices over the past 18-24 months has triggered a growing debate around the heightened risk to financial system stability. In particular, the debate has centered on whether additional regulatory intervention in the form of so-called macro-prudential tools are required to stem the growth in property prices. Standard & Poor's considers that a sustained and strong increase in property prices adds to the imbalances in the economy, in that it increases the risk of a rapid downturn in property prices, which could eventually...
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Actual capex records surprise lift

ScreenHunter_5182 Nov. 27 11.43 By Leith van Onselen The Australian Bureau of Statistics (ABS) today released data on capital expenditures (capex) for the September quarter of 2014, which registered a surprise 0.2% seasonally adjusted lift in capex over the quarter but a 5.9% decrease over the year. The result beat analyst’s expectations of a 1.9% fall over the quarter (see below table). While Houses and Holes has covered the more important capex intentions survey, which covers industry’s forward-looking capex plans over the coming years, below are some backward looking charts showing actual capex up to the September...
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Expected capex holds up

0 The Australian Bureau of Statistics (ABS) has released the fourth estimate for expected capex for 2014/15 for the September quarter and the result is a slight positive with expectations firming a little. Estimate 4 for total capital expenditure for 2014-15 is $153,210m. This is 7.5% lower (-$12,492m) than Estimate 4 for 2013-14. The main contributor to this decrease was Mining (-$17,355m). Estimate 4 is 2.2% higher (+$3,262m) than Estimate 3 for 2014-15. The main contributor to this increase was Other Selected Industries (+$2,594m). MININGEstimate 4 for Mining for 2014-15 is $86,253m. This is...
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WA spike saves HIA new home sales

kuyvb HIA new homes sales for October are out and are clearly past the peak, other than a freakish spike in WA that looks rather like a one-off: Total seasonally adjusted new home sales increased by 3.0 per cent in October 2014 following a flat result in September. Detached house sales recorded a healthy increase in Victoria (+4.7 per cent) and a very strong rise in Western Australia (+24.8 per cent), which drove total detached house sales up by 6.0 per cent in the month. Multi-unit sales dropped by 10.5 per cent in October, following growth of 11.0 per cent in September. After a...
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