Investors see rising mortgage risks

ScreenHunter_5841 Jan. 30 14.53 Cross-posted from MARQ Services Morgij Analytics has this morning released a survey of institutional investors and other financial market participants taken in the latter part of 2014 to gauge respondent’s views of the drivers for Australian housing and mortgage markets for 2015 and beyond. Survey participants were asked to rate 20 drivers of Australian housing and mortgage markets and the overall index showed a mild negative bias coming in at -1. A level below 0 reflects the likelihood of increased risks in Australian housing. Graham Andersen, Chairman and Founder of Morgij...
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Lower petrol prices worth two rate cuts

ScreenHunter_04 Sep. 23 15.14 By Leith van Onselen There's a lot of commentary today suggesting that lower petrol prices are providing a benefit to households equivalent to up to two rate cuts. From The AFR: Deutsche Bank says households are receiving a $7 billion boost from lower petrol prices. "That's equivalent to more than 50 basis points of interest rate cuts, or roughly 2 per cent of retail trade and 1/3 the size of the Rudd government stimulus payments," Deutsche analysts write in a note... Bank of America Merrill Lynch's Saul Eslake [says] the fall in petrol prices equates to a sizable rate cut. "Retail petrol...
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Another bumper month for home loans

ScreenHunter_06 Jun. 26 22.42 By Martin North, cross-posted from the Digital Finance Analytics Blog APRA just released their monthly banking statistics, which provides a view of lending and deposit portfolios from the banks (ADI’s). Overall home lending by the banks rose $9.12 billion to $1.315 trillion. Owner Occupied loans grew by 0.59% and Investment Loans by 0.9%, with Owner Occupied Lending now accounting for 65.1% of the loan book (down from 65.2% last month). Looking in more detail at the individual bank data, we see that CBA maintains its leading position in the Owner Occupied sector, whilst WBC leads the Investment...
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PPI confirms lack of inflationary pressures

ScreenHunter_5834 Jan. 30 12.06 By Leith van Onselen The Australian Bureau of Statistics (ABS) today released Producer Price Index (PPI) data for the December quarter, which has registered a 0.1% quarterly increase in final (stage 3) prices and an increase of only 1.1% over the year: The 0.1% increase in final (stage 3) prices was driven primarily by increases in the prices received for building construction (+0.6%), other transport equipment manufacturing (+5.8%), and computer and electronic equipment manufacturing (+5.5%), partly offset by falls in the prices received for petroleum refining and petroleum fuel...
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Investor mortgage growth hits double digits

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of December: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (0.0% MoM; 0.1% QoQ; 0.9% YoY) remains in the gutter, whereas business credit growth (0.5% MoM; 1.4% QoQ; 4.8% YoY) and housing credit growth (0.6% MoM; 1.8% QoQ; 7.1% YoY) continue to accelerate, but remain below their long-run average growth rates (although housing credit is still growing more than twice as quickly as wages and off a very large...
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Metadata: a honey pot for hackers and lawyers

ScreenHunter_5827 Jan. 30 10.10 By Leith van Onselen The Abbott Government's metadata legislation, which would require telecommunications companies to store detailed information about the calls and internet use of its customers for two years, has come under fire from Telstra's chief information security officer, Michael Burgess, who claims that a central data storage system would be an attractive target for hackers, including foreign spy agencies. From The ABC: "The issue here is now we're advertising that for a customer of Telstra, there's a whole range of data, depending on what services they have, that we made available, or...
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Can Turnbull fix the NBN?

ScreenHunter_5820 Jan. 30 08.50 Cross-posted from The Conversation: The rules around the NBN have moved rapidly over Christmas. On December 14th, the Minister for Communications, Malcolm Turnbull, released new rules requiring all providers of high-speed broadband services to be vertically separated. These rules were aimed at TPG, which was rolling out fibre-to-the-basement (FTTB) in urban apartment buildings. FTTB would compete against the NBN and potentially undermine the ability of the NBN to use high city prices to subsidise the bush. The new license conditions had their effect. They stopped TPG, at least...
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Aussies continue exodus to New Zealand

ScreenHunter_5821 Jan. 30 09.00 By Leith van Onselen Statistics New Zealand has today released its permanent & long-term migration figures for December 2014, which revealed that net migration from New Zealand to Australia is at the lowest level in around 21 years: According to Statistics New Zealand: The unadjusted figures for the December 2014 year showed New Zealand's net gain of migrants (50,900) exceeded 50,000 for the first time... The increase in migrant arrivals between the December 2013 and 2014 years was led by India (up 4,600), Australia (up 3,700), China (up 1,300), and the Philippines (up 1,200). The...
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Townsville bust harbinger for Perth?

ScreenHunter_5816 Jan. 30 06.53 By Leith van Onselen The AFR is reporting today that Townsville's property market is being hammered by falling prices and rents as the mining bust takes hold, and a flood of subsidised housing pushes up vacancy rates: Townsville... is struggling to cope with an increase in subsidised housing and rising unemployment, which are driving up mortgage arrears and vacancies. ...“Rents are now falling and investors are unable to find tenants due to the oversupply,” [Domain Group's Dr Andrew Wilson said]... Defence Housing Authority projects had added to the problem... Last year house prices fell...
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Will house prices fall on rising supply?

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen Stephen Koukoulas (aka "The Kouk") has penned an interesting piece in The Adelaide Review arguing that Australian housing could face a 5% to 10% 'correction' over the next three or so years as strong dwelling supply outstrips falling population growth: During 2014, there has been an important change in the supply and demand fundamentals. Australia’s population growth is starting to slow... [Yet] the most recent building approvals data show a sharp lift in new dwelling construction... The annual pace of new dwelling approvals rose to above 190,000 in April 2014, and in...
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RP Data weekly Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 29 January 2015, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.46% (see next chart). Home prices rose in all major capitals (see next chart). So far in January, home values nationally have risen by 1.18%, with the three biggest capitals rising and Perth and Adelaide falling in value (see next chart). Over the past 12 months, home values have risen by 8.16% at the 5-city level, with all capitals rising in value (see next chart). The next chart plots the daily...
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PC review could bring Coalition unstuck

ScreenHunter_5804 Jan. 29 13.09 Cross-posted from The Conversation. Australia’s federal government has made a major political error, possibly terminal, in asking the Productivity Commission (PC) to inquire into industrial relations. Before the 2013 election, the strategy of the Coalition appeared to be to say as little as possible, especially about industrial relations. It would then go to the 2016 election, bolstered by the “sophomore surge” of new members building their personal support, and seek a mandate for a bold plan, to get an otherwise “once in a generation” reform through the parliament. This would follow...
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Overseas born Aussies hit 120-year high

ScreenHunter_5798 Jan. 29 12.07 The Australian Bureau of Statistics (ABS) has today released its annual migration report, which reveals that the proportion of Australians born overseas hit an 120-year high of 28.1% (6.6 million people) - a level not seen since the gold rushes of the late-1880s. According to the ABS, this increase has been driven by people from India and China: "Overseas migration has been a large contributor to the total Australian population growth for several years - it has consistently been the main driver since 2005-06, contributing more than 50 per cent of population growth in Australia. "While the...
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Australia’s terms-of-trade to fall further

ScreenHunter_05 Mar. 12 11.39 By Leith van Onselen The Australian Bureau of Statistics (ABS) released export and import prices for the December quarter, which portends a smaller than expected fall in Australia's terms-of-trade when the national accounts are released in early March. According to the ABS, export prices were dead flat in the December quarter but were down by 9.1% over the year. By contrast, import prices rose by 0.9% over the December quarter and by 0.3% over the year (see below table). As you can see, the falling oil price has significantly depressed import prices, helping to offset some of the pain from...
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Resources job vacancies down 34% in 2014

ScreenHunter_03 Jul. 23 09.31 By Leith van Onselen DFP Recruitment has released its mining and resources jobs index for December, which registered a seasonally adjusted fall of 2% to 67.27, marking nine falls out of the past ten months. Year on year, the number of mining and resources job advertisements has fallen by 34.3% nationally, but by only 4.9% in the last quarter. December saw a 1.2% fall in permanent demand and a 3.0% fall in temporary and contract job advertisements (see next chart). According to DFP, "the principal factor driving demand or the reduction in demand, is the price of commodities... we have...
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D-Day looms for Coalition’s university reforms

ScreenHunter_26 Oct. 16 10.41 By Leith van Onselen The AFR is reporting today that the Abbott Government will dump its controversial university reforms if it is unable to gain passage through the Senate by the end of March. The Senate blocked the university reforms before Christmas, defeating the measure 33 against to 31 for, with Labor, The Greens, South Australian senator Nick Xenophon and Palmer United Party (PUP) senators Zhenya Wang and Glenn Lazarus among those that voted against the Bill. Already, the Government has agreed to a range of compromise measures, including pegging the interest rate on student loan...
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ACOSS charts fairer path to Budget surplus

ScreenHunter_5789 Jan. 29 08.05 By Leith van Onselen The Australian Council of Social Service (ACOSS) has released its pre-Budget submission, which charts a fairer path back to Budget surplus by unwinding inefficient and inequitable tax and welfare arrangements, rather than through direct spending cuts. ACOSS claims that it has identified "more than $13 billion of potential savings in the next financial year, rising to over $18 billion in 2016-17, through measures which it says restore the integrity of Australia's progressive tax system... When two thirds of the structural budget deficit is due to declining revenues, we need a...
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Domain: House price growth continues to slow

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen Domain Group (previously known as Australian Property Monitors) has released its December quarter house and unit price results (below), which recorded a 2.1% increase in house prices over the quarter at the national capital city level, and a 1.7% rise in national capital city unit prices. In the year to December 2014, APM recorded an 7.1% increase in national capital city house prices and a 6.0% rise in unit values - a deceleration from the 9.4% (houses) and 6.8% (units) annual growth reported in the September quarter release. Looking at the capital city breakdown, you can...
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QLD politicians’ $91 million property holdings

ScreenHunter_5775 Jan. 29 06.41 By Paul Egan, Philip Soos & Lindsay David Introduction Following our analysis of Federal and Victorian Parliamentarians’ real estate holdings, attention turns to Queensland, where Premier Campbell Newman has called a snap early election for 31st January, 2015. Australia, including Queensland, is facing a chronic housing affordability crisis. Housing price inflation has outstripped both rents and household incomes since 1996, leading to a residential property market that is unaffordable by both historic and international comparison. Queensland’s elected representatives, like their...
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Australia to export flawed PPPs to the world?

ScreenHunter_06 Jun. 06 09.33 Cross-posted from The Conversation: While in Davos representing Australia at the World Economic Forum, Assistant Treasurer Josh Frydenberg has enthusiastically extolled the virtues of the Global Infrastructure Hub as a way of funding an infrastructure shortfall, particularly in developed nations. Frydenberg told the ABC: “There is a great deal of interest here at Davos in what Australia is doing because essentially this infrastructure hub is a knowledge sharing platform. It is about sharing best practice across the funding of infrastructure, the construction of infrastructure and the...
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Rental growth at decade low

ScreenHunter_07 Jul. 17 21.09 By Leith van Onselen The December quarter consumer price index (CPI) data, released today by the Australian Bureau of Statistics (ABS), revealed continued moderate rental growth at the national capital city level. According to the ABS, rents nationally grew by 0.5% over the December quarter of 2014 – the lowest quarterly growth since March 2005 – and was up by only 2.4% in the 2014 calendar year, with a clear downwards trend evident (see below charts). What's most interesting about the current moderate rental growth is that it is at odds with other housing-related indicators, such...
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CPI in detail: Inflation well checked

ScreenHunter_01 Jun. 08 23.33 By Leith van Onselen As noted briefly by Houses & Holes, the Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the December quarter 0f 2014, which registered a modest quarterly increase in headline inflation, but with underlying inflation rising well ahead of expectations (although well contained in annual terms). According to the ABS, headline CPI rose by a modest 0.2% in the December quarter, which follows September's 0.5% rise (see next chart). On an annual basis, headline CPI growth fell to 1.7% from 2.3% in the September quarter, which is...
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Coalition to compromise on university funding

ScreenHunter_26 Oct. 16 10.41 By Leith van Onselen The Australian is reporting today that the Abbott Government will compromise on its university reform package in a bid to gain passage through the hostile Senate. The Government has reportedly flagged that it will abandon its proposed 20% cut to university funding provided the Senate allows universities to set their own course fees - a move that would likely blow another $2 billion hole in the Budget. The compromise is designed to gain the support of South Australian senator Nick Xenophon and Palmer United Party senators Zhenya Wang and Glenn Lazarus, who voted against the...
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ANZ-RM consumer confidence eases

ScreenHunter_20 Apr. 10 19.28 By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index fell by 0.4 points (-0.35%) in the week ended 25 January 113.2, to be tracking in line with the long-run average (see next chart). In light of the lacklustre consumer mood, which has drifted sideways for five months, ANZ chief economist is now calling on the RBA to cut interest rates to boost sentiment: "It appears that the impetus from continuing asset price gains and lower petrol prices is being outweighed by concerns about job security, weak wages growth, a lower Australian dollar and concerns about the...
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Hockey launches minimum wage suicide mission

$(KGrHqFHJEQFGS!1YvwyBRn5OYB4nw~~60_35 By Leith van Onselen The media is abuzz today with claims that the Howard Government's dreaded "Work Choices" policies are set to be reincarnated by the Abbott Government, which has tasked the Productivity Commission with investigating the effectiveness of penalty rates and examining whether increasing the minimum wage costs jobs. The left fears that the minimum wage is under direct attack, as are penalty rates and laws protecting workers from unfair dismissal. For its part, the right, represented enthusiastically by the Institute of Public Affairs (IPA), claims that the minimum wage creates...
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