Links 12 July 2019

Global Macro / Markets / Investing:

Americas:

Europe:

Asia:

Trans-Tasman:

Comments

  1. … UNITED STATES …

    Skyrocketing home prices fueled by increase in land cost, says Harvard University study – Washington Times

    https://www.washingtontimes.com/news/2019/jul/9/skyrocketing-home-prices-fueled-by-increase-in-lan/

    Skyrocketing U.S. home prices, which have surpassed bubble levels of 2005-06, are being driven by a dramatic increase in the cost of residential land, according to Harvard University’s Joint Center for Housing Studies.

    From 2012 to 2017, the median price per acre of residential land for existing single-family homes nationwide jumped 27%, from $159,800 to $203,000, researchers say. Such increases are fueling an affordability crisis for first-time home buyers and renters, with new home construction struggling to “barely keep pace” with the number of new households.

    Compounding the sluggishness in housing construction is a tight labor market, excess housing supply built up in the boom before the Great Recession and “most significantly” regulatory constraints on development, according to Harvard’s “State of the Nation’s Housing 2019” report.

    “These [regulatory] constraints, largely imposed at the local level, raise costs and limit the number of homes that can be built in places where demand is highest,” said Chris Herbert, managing director of the Joint Center for Housing Studies. … read more via hyperlink above …
    .
    .
    Definition Of An Affordable Housing Market – Performance Urban Planning

    http://www.performanceurbanplanning.org/affordability.html

    2019 15th Annual Demographia International Housing Affordability Survey

    http://www.demographia.com/dhi.pdf

  2. Latest wage theft case:

    13 hours ago

    $10 million stolen over the last 6 years by Michael Hill Jewellers.

    jail time, were recommended in Mr Fels’ Migrant Workers’ Taskforce review. The Morrison government has accepted the review’s 22 recommendations in principle but is yet to enact them.

    https://www.smh.com.au/business/companies/jewellery-chain-michael-hill-underpaid-staff-up-to-25m-20190711-p5266w.html

    Just like gas theft. Turnbull refused to enforce DGSM and now Scummo refuses to implement jail for wage theft.

    Sally McManus said employers were breaking the law everyday and the government needed to do more to stamp out wage theft.

    Oh Sally, why do you have a pact with Angus Willox? Angus loves wage theft.

    https://www.nationalmigrationcompact.org.au/

  3. Had an interesting sort of finance experience lately.

    I sign up for credit cards and churn them for bonus points. Always pay the card off etc each month, never missed a payment ra ra ra. Yes it’s actually beneficial – I’ve flown business class internationally 7 times for approx. $1.5k. Anyway – this time I applied, submitted my info and then received a call from the bank person wanting to verify all my details on the phone first. I’ve got a decent enough income, good savings and investments and my only debt is approx. 15k of HECS which will be paid off when i submit my tax return. This has never happened to me – usually it’s just an immediate yes you’re approved, email through recent payslips and you’re good to go.

    it was bankwest if that helps at all. I’ve had cards with most banks now and it’s never happened previously.

    • after returning from USA I found it amazing how easily Aussie banks approve credit cards and how much limit they give

      in States, even during boom days one needed to have a decent credit history, good income to get $10k limit
      In Australia foreign students and pensioners have few cards with $30k or something like that each

      • I can’t find data on this or the broader question on the level of all debt types by residency type / citizenship. Surely the banks themselves know – bad loan flight risk is surely much higher with non-citizens or dual citizens.

      • come on, people coming from china on holidays (with just 2 week tourist visas) used to be given >$1m loans with 90% LVR to buy dodgy units
        $30k CC limit to students likely to stay here forever is “safe as houses” in comparison

        BTW
        I met students who are funding their studies here by shifting large debts from one to another CC with 12m zero interest periods

      • drsmithyMEMBER

        When I lived in the US 2009-2011 it was almost entirely about your credit rating. So long as that was good (takes 6-9 months to reach “good to excellent” from scratch if you do it right) then pretty much any form of credit was fine so long as it wasn’t ridiculously out of line with your income.

        But that also applies on the flipside. I had a mate who arrived in the US at the same time I did, didn’t take action to build up a credit rating, and after 12 months couldn’t lease a $30k car on a $100k+ income because the first step of the credit check failed.

        If you do it right, shifting CC debt around with interest-free periods is a great way to have a few tens of $thousands sitting in an offset against your mortgage (or an interest-free car loan). Assuming, of course, you have the discipline not to spend it. Though since approval standards have definitely tightened and credit reporting become much more detailed in the last 18 months or so, it’s probably a lot harder now.

    • drsmithyMEMBER

      I actually got knocked back on a CC for the first time in probably a decade a couple of months back.

      CC approval standards are clearly tightening – I was approved for the same card, from the same bank, with the same limit and under the same income/expenses equation less than two years ago. The new credit reporting may also be having a side effect, as churners become a lot easier to identify.

    • I’m just waiting for the headline where the Federal government blames the RBA for the state of the economy.

  4. More vibrant’s in the news, this time its money laundering. Presumably came here via a STUDENT visa.
    https://www.smh.com.au/national/nsw/sydney-security-firm-an-alleged-front-for-80m-organised-crime-syndicate-20190711-p526e2.html.
    Mr GAGANDEEP PAHWA studied at an International school in India.
    Seemingly did a IT degree at Curtin University. – It would be reasonable to assume as a overseas student.
    https://www.linkedin.com/in/gagandeep-pahwa-7957b066/?originalSubdomain=au
    on his linkedin page is a website list http://www.sharpeyesgroupsolutions.com.au
    “Sharpeyesgroupsolutions” has the same Guildford office address as “Assure Protection Services”
    23 / 575 Woodville Road , Guildford NSW 2161
    http://www.assureprotection.com.au/contact