Links 19 June 2019

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Latest posts by Unconventional Economist (see all)

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  1. … CHINA … HOUSING …

    China’s home prices growth fastest in five months, raises policy challenge – Reuters

    https://www.reuters.com/article/us-china-economy-houseprices/chinas-home-prices-growth-fastest-in-five-months-raises-policy-challenge-idUSKCN1TJ04J

    … important earlier reports …

    China’s debt disease is infecting its housing market — Gwynn Guilford – Quartz

    https://qz.com/1615596/chinas-debt-disease-is-infecting-its-housing-market/

    China’s empty homes may prove a bigger threat than Donald Trump’s tariffs … Michael Janda … ABC News (Australian Broadcasting Corporation)

    https://www.abc.net.au/news/2019-05-14/china-vacant-property-empty-homes-donald-trump-tariffs/11082900

  2. … NEW ZEALAND … ANZ Bank Key / Hisco circus … continues …

    ANZ completed probe into Hisco’s expenses before staff were told of sick leave | Stuff.co.nz

    https://www.stuff.co.nz/business/113589665/anz-completed-probe-into-hiscos-expenses-before-staff-were-told-of-sick-leave
    .
    Google New Zealand Search ‘ANZ David Hisco’ …

    https://www.google.co.nz/search?source=hp&ei=2hkJXZiIFNK7rQGkjKLQBA&q=anz+david+hisco&oq=anz+david+hisco&gs_l=psy-ab.12..

  3. Mr RobertsMEMBER

    Interesting comment from goolge reviews on Mascot tower…
    “As ex owner and attendee at all of the strata committee meetings i know these cracks and issues were there LONG before now. Since year two there huge cracks above where my car was parked spanning the entire level. these were brought to the committee’s attention NUMEROUS TIMES whilst the building was under warranty. Many many problems existed before today. One would hope the committee has this documented but is too late now.”

    Gives gravity to the argument that the developers are in cahoots with strata management, thus delaying claims until clear of the warranty period.

    Although I wouldn’t call it a black swan, it probably has shaken public perception of the ‘safe as houses’ investment.

    • I saw that too, which I found very insightful. I reckon they kept delaying any action on it, until the builder could make the company insolvent and enough time went by to ensure they would no longer be liable.

      To be the fly on the wall at new apartment block strata meetings..

    • steel rebar ….snafu
      https://www.asx.com.au/asxpdf/20180405/pdf/43szjfqlkb413l.pdf

      pages 11 and 12……*new standards for chinese rebar require increased vanadium use,DOUBLING TO THE REST OF THE WORLD STANDARDS* fmd😩😩
      and …*new chinese rebar standard in effect on the 1st OF NOVEMBER 2018!*
      of course they only started making rebar in December 2018 so its all good😆😆😆
      And might I posit that whatever rebar standard is in effect currently that standard is being RORTED!!….or is the point moot?

      • Maybe that should read as “doubling to match world standards”. You’d know in the industry that they’ve been short on vanadium & god knows what else over the years – hence the Chinese sh1t Plasticine we’ve had to weld & machine.

      • Now they’ll have to rebuild everyhighrise in China, GDP up, officials get promoted, boom times for Oz?

    • Strata managers are just another conduit for more succubus fleecing! I attended my first Strata management meeting a couple of months ago – what an experience! (have attended a few some years ago as a tenant representing the owner) The increasing red tape has turned it into an industry for ‘Professional management” only. It’s just getting too hard to get it right for the traditional garage meeting with someone within the complex managing it. It was nothing but a 2hr sales pitch! Insurance options with declared kickback. Recommended everything, ongoing pest inspection – from a mate, ongoing building inspection, financial strata plan consultant – it just went on & on, all with their sweet little deals I’m sure – spend, spend, spend. Then when we got the minutes they weren’t near accurate, could’ve been an entirely different building. We called for clarification & were told that if we wanted it corrected we’d have to spend more & have another meeting – because she’s incapable of listening, too busy pitching! They also rely on the privacy act by not using a common email cc & play occupants against each other to get what they want – as if we don’t speak to each other…….. Totally pathetic joke! But Jerbs…….

      • Strata’s not the same as owning outright. You’ve got to think about the earnings capacity of the rest for special levies, who likes what colours, style if modernizing…… & on it goes. I remember someone once rubbishing committees for never getting anything done – too many competing thoughts/emotions/interests, & they’re pretty right!

        In our case it’s a $ save from renting Gav & we can live with it, (I didn’t want to commit all our funds to a standalone – trading) but ideally, no you don’t want the headaches, stay under 4 & there might be easier consensus. Mate, the block is right on the Golf course & a 500yd walk to the beach……. I’m not attached to it, but if this is it, it’ll do fine…! Just gotta stop the missus from putting so many nails into the walls without thinking about where they’re going ; )

    • Apparently the strata management at the infamous Elara Apartments in suburban Canberra jumped through all the required legal hoops in a timely manner seeking to get compensation for the millions in repair work needed on that development. It seems that part of the problem was the developer pheonixed some way through the process. Finally they ended up at the last stop – the master builders insurance cover – only for the judge to rule that they had taken too long to arrive at that point and so they were not covered at all. Last I heard they were thinking of mounting an appeal based on “the law is an ass” defence but …

  4. Well, it’s not like the government forecasters have covered themselves in glory being right at least 50% of the time, so, really, why would they be right this time?

    https://www.afr.com/news/politics/nsw-expects-its-housing-market-to-recover-in-a-year-20190617-p51yod

    Finally, a forecast which if it goes wrong, will make my heart sing!

    On the other hoof, I guess these guys could just HODL, but hey, nobody TODL them:

    https://www.afr.com/real-estate/residential/desperate-off-the-plan-buyers-seek-early-exit-20190613-p51xbp

    The FONGO money-shot:

    Portals like realestate.com.au and Gumtree currently list dozens of nomination sales, including apartments in Lendlease’s Melbourne Quarter, UEM Sunrise’s Aurora high-rise tower in the CBD and Australia 108.
    “I spoke to one man who lives in Sydney who bought two apartments in Brisbane four years ago who is not settling. He simply wants to sell the property before settlement or nominate an alternate buyer at a selling price less than he paid provided he can salvage some of his deposit back,” Mr Sacks said.
    “Just to get off the hook he would probably leave his deposit in the deal and just walk away.

  5. From the education divide in the conversation – “I think Morrison won support from the lower-educated because they are sceptical of “inner-city elites”.

    Yah, well I might posit that education & brainwashing might have a correlation….. not that it’s always wrong to get everybody on a similar groupthink page, just which page & for what purpose?

    You can’t run endless divide & conquer & then complain about not being able to herd the cats!