Unconventional Economist


How housing killed Australia’s productivity

The Australian’s Robert Gottliebsen has written an interesting article, based on research by former ANZ Bank director John Dahlsen, explaining how Australia’s housing obsession has diverted resources from the real economy and is stifling the nation’s productivity: In the decade before the 1987-89 crash banks poured vast sums into business credit but they were enticed


Australia joins vaccination leaders as COVID runs rampant

Last week, Australia passed the 95% single vaccination threshold for the 16-plus population, with 92.6% double vaccinated. This has put Australia among the world’s leaders on vaccination, with 76% of the entire Australian population now double vaccinated and a further 4% single dosed: Despite its high vaccination rate, Australia is also now one of the


Links 19 January 2022

Global Macro / Markets / Investing: Trickle down economics: Up to 3/4 of the $800 billion PPP flowed to business owners instead of workers, study finds – Market Watch The wealth of the 10 richest men in the world has doubled during the pandemic and the income of 99% of humanity has decreased – Madgy67


New Zealand’s housing correction begins

Earlier this month, I tipped that New Zealand’s housing market was poised for a correction after experiencing record breaking growth of 27.6% 2021, according to CoreLogic: Today, the REINZ released its house price index for December, which recorded a 1.6% monthly decline; although prices were still up 21.5% over the calendar year: The next table


Queensland’s deadliest COVID day

Queensland recorded 15,962 new COVID cases over the past 24 hours alongside a record 16 deaths: The next chart plots the flow of daily cases across Queensland: Active cases are steady at 86,561: Whereas hospitalisations have risen to 819, with 50 in ICU: Queensland has recorded 45 deaths since the state border opened on 13


Immigration into Australia still negative

The reopening of Australia’s international border saw a solid increase in overseas arrivals and departures in November, according to new data published today by the ABS: There were 197,000 overseas arrivals to Australia and 229,000 overseas departures from Australia in December 2021, the highest volumes since international travel restrictions were introduced in March 2020, according


Jason Falinski: Immigration has no impact on housing supply

Liberal MP Jason Falinski, who is the chairman of the parliamentary inquiry into housing affordability and supply, has penned a contradictory propaganda piece in The Australian claiming that Australia’s housing woes are caused entirely by a ‘lack of supply’, which is supposedly unaffected by mass immigration: For years governments, through inaction or special interest lobbying,


Frydenberg plays class warfare card as billionaires double wealth

Treasurer Josh Frydenberg has kicked off the election cycle by scaremongering over Labor’s “class warfare”: “Anthony Albanese has spent his whole career arguing for higher taxes whether it was the retirees tax or the housing tax or the super tax, and a big supporter of the carbon tax and the mining tax”… “Anthony Albanese has


Aussie COVID deaths soar

NSW recorded 29,830 new COVID cases over the past 24 hours alongside 36 deaths: Victoria recorded 20,180 new cases and 22 deaths: Daily cases since the beginning of the Delta waves last winter are plotted below: Active cases across both NSW and Victoria seem to have passed their peak: Hospitalisations are still rising in NSW:


Employers: 3% wage growth risks jobs. Give us migrants instead!

At the same time as employer groups are complaining of acute “skills shortages”, and are begging the federal government to open the immigration floodgates, they are pushing back against the unions’ “unsustainable” demands for 3% wage rises: Key unions have vowed to pursue “significant” annual pay rises of at least 3 per cent in 2022…


Links 18 January 2022

Global Macro / Markets / Investing: A Population Bust Is Coming—But Maybe That’s Not a Bad Thing? – Pairagraph World’s 10 richest men see their wealth double during Covid pandemic – The Guardian Supply Chain Woes Could Worsen as China Imposes New Covid Lockdowns – NY Times These are the video game studios leading the


SA records 3829 COVID cases as NT locks down

South Australia has recorded another 3829 new COVID cases over the past 24 hours: The next chart plots daily cases across South Australia: There are 33,703 active cases across South Australia: Whereas hospital admissions have have retraced to 227: Across the smaller jurisdictions: Tasmania recorded 1037 cases, up from 825 yesterday; ACT recorded 1601 cases,


Ardern looks to pump faltering New Zealand mortgage market

Mortgage demand in New Zealand fell sharply in the final quarter of 2021, according to credit reporting company Equifax: “Credit inquiries are a lead indicator of housing turnover and price movement, and despite the increase in house prices across New Zealand in the December quarter, the recent reduction in mortgage demand may indicate cooling prices


US & UK shame RAT Morrison

The US government announced over the weekend that it would provide one billion free rapid antigen tests (RAT) to its citizens, while the UK government has been providing free RATs for months through chemists and online. However, Australian Health Minister Greg Hunt says the federal government does not intend to follow the US’s lead, while


Australia’s ‘shadow lockdown’ delivers open goal to Labor

Driving around Melbourne’s streets over the past fortnight has been an eerie experience. Despite stunning summer weather, the roads are dead and shops/cafes are open but largely devoid of clientele. Last Saturday evening at around 5pm my family visited Easton Mall in Oakleigh – a famous mall of Greek restaurants and cafes. Our car was


QLD COVID cases vanish into thin air

Queensland has recorded 15,122 new COVID cases over the last 24 hours and seven deaths: Perversely, active cases have more than halved from 203.657 yesterday to 86,953 today: Finally, and most importantly, Queensland COVID hospitalisations have risen to a record high 702, of which 47 cases are in ICU (15 ventilated): Meanwhile, the Palaszczuk government


Rents boom as listings dry up

Domain has released is Q4 Rental Report, which shows that house rents nationally surged by 7.4% across the capital cities in 2021, with all cities other than Melbourne recording strong growth: Capital City Dec-21 Sep-21 Dec-20 QoQ YoY Sydney $600 $580 $550 +3.4% +9.1% Melbourne $445 $430 $440 +3.5% +1.1% Brisbane $480 $460 $425 +4.3%


Student visas become unlimited work visas

Last month, the Morrison Government announced reforms to visa arrangements to ensure a “rapid return of international students”. The reforms included: granting a two year Temporary Graduate visa to Vocational Education and Training (VET) sector graduates; and extending the temporary graduate visa from two to three years for masters by coursework graduates. Days later, the Times


Mortgage commitments signal Aussie property market slowdown

As regular readers know, I consider the growth in new mortgage commitments to be the key short-term indicator for property prices. The latest ABS housing finance data for November, released on Friday, showed that mortgage growth slowed sharply over the prior six months. This suggests that dwelling value growth should slow given most homes in


Links 17 January 2022

Global Macro / Markets / Investing: In the wake of unequal vaccine rollouts, countries face a ‘Wild West’ scramble for covid pills – Washington Post World Bank warns global economy faces grim outlook – BBC Oil Producers Aren’t Keeping Up With Demand, Causing Prices to Stay High – NY Times Toxic Culture Is Driving the


Investor mortgage demand hits all-time high

The Australian mortgage market rebounded in November, according to new data released today by the Australian Bureau of Statistics (ABS). The total value of new mortgage commitments rose by a seasonally adjusted 6.3% in November 2021 to be up 33.2% year-on-year: Investor mortgage demand has finally surpassed its 2015 peak. They are also growing at


Weekend Reading: 8-9 January 2022

Global Macro / Markets / Investing: Moderna CEO warns people may need fourth Covid shot as efficacy of boosters likely to decline over time – CNBC Crypto scammers took a record $14 billion in 2021 – CNBC Nuclear energy backers say it’s vital for the fight against global warming. Don’t be so sure – LA


Victoria is a fine state

In 2020, independent economist Saul Eslake slammed the heavy handed display by the Victorian Government and Police against its own citizenry in enforcing its draconian COVID-19 lockdown rules. According Eslake, Victorians during the first lockdown payed almost $6 million in fines for breaching COVID restrictions, $2.2 million more than the rest of the country combined: “Let


Million dollar listings becomes norm in NZ

According to CoreLogic, New Zealand property finished with an average price of $1,006,632 and record-breaking annual market growth of 27.4%: This surpassed the previous record of 24.4% annual growth in 2003. The breakdown of growth across jurisdictions is presented below, with Auckland, Wellington and Tauranga topping the $1 million mark: The extreme growth has pushed