Unconventional Economist

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“No more Chinese” crashing property

By Leith van Onselen The latest NAB survey: And the latest FIRB report for 2017-18: Both showed a collapse in foreign buyer demand, particularly from China. Today, The AFR reports that property values in suburbs that were once hotbeds for Chinese investment are plummeting: Houses in the suburb of Penshurst, 17 kilometres south of Sydney’s

56

5 million Aussies left behind by mass immigration disaster

By Leith van Onselen Glenn Docherty, chair of the National Growth Areas Alliance, penned a disturbing article in Fairfax claiming that five million Aussies living in Australia’s outer-suburban areas have been left without adequate access to infrastructure or services as Australia’s population has ballooned: …for nearly one fifth of Australia’s population, the federal government’s piecemeal approach

14

Links 20 February 2019

Global Macro / Markets / Investing: The Bank for Japanese Farmers That Fuels the Global Lending Market – WSJ Global Slowdown Leaves Growth Weakest Since Financial Crisis – Bloomberg The perils of Big Data: How crunching numbers can lead to moral blunders – Washington Post Americas: Elizabeth Warren To Unveil Major New Child Care Initiative

25

Unemployed punished by ‘punitive’ Jobactive program

By Leith van Onselen The Coalition Government has been a curse for Australia’s unemployed. In addition to refusing to lift Australia’s disgracefully low Newstart Allowance: The Coalition’s $65 million a year Work-for-the-Dole program has been an unmitigated failure, whereas its Youth-Jobs PaTH program has become a slave labour scheme in disguise. Now we can add

26

Smoke alarms to fix forest of towering infernos

By Leith van Onselen The fallout from the recent fire at the 41-storey Neo200 building on Melbourne’s Spencer Street continues, with owners of buildings covered in flammable cladding ordered to move smoke alarms closer to danger zones. From The Canberra Times: The order comes as Melbourne City Council’s chief building surveyor warned one building’s owners

32

Desperate developers rain incentives on buyers

By Leith van Onselen With a near record level of apartments still under construction across Australia: Concentrated in Sydney and Melbourne: And dwelling values plummeting across the two major markets: Developers are getting increasingly desperate, throwing incentives at buyers to clear surplus stock. From Domain: Free mortgage payments are among the latest incentives on offer

29

Fake Greens scuttle sensible super reform

By Leith van Onselen Legislation passed by the House of Representatives yesterday will give the Australian Taxation Office more power to consolidate low-balance and inactive superannuation accounts. It will also cap fees on accounts with balances of less than $6,000 at 3% and will ban exit fees. However, the federal government’s plan to make insurance

19

Captured Coalition unleashes property locust storm

By Leith van Onselen In the ultimate sign of desperation, the Morrison Government has rolled-out several real estate industry lobbyists to campaign against Labor’s negative gearing and capital gains tax (CGT)reforms. From The AFR: “When you converge the royal commission and APRA regulation with a big fiscal policy change you are asking for trouble,” Mark

6

Choice: Mortgage broking lobby already proving Hayne right

By Leith van Onselen The CEO of consumer advocacy group Choice, Alan Kirkland, has penned an enlightening article lashing the mortgage broking industry, claiming it is using the same dirty tricks deployed by the advice industry when it was forced to move from a commissions-based model under the FoFA reforms: Within hours of the final

27

Affordable Melbourne property vanishes amid housing bust

By Leith van Onselen A strange situation has developed across Melbourne’s housing market. Despite the overall market crashing, down around 9.5% from peak and the pace of losses accelerating: The number of suburbs with a median house price below $400,000 has vanished to zero. From RealEstate.com.au: Suburbs with median house prices below $400,000 are now

56

NSW Libs deploy planning propaganda 101

By Leith van Onselen The NSW Liberal Government has resorted to propaganda in a bid to deflect voter anger about overdevelopment and declining liveability in the lead up to the state election. Instead of being honest and upfront about the massive number of apartment developments planned for Sydney, the Government is instead spruiking “more parks

21

CoreLogic leading indices point to more housing falls

CoreLogic’s leading indices are out and they continue point to further house price weakness. After barely retracing over the Christmas break, listings are beginning to rocket into the Autumn not-selling season: By contrast, trend finance commitments have plummeted: As we already know, housing finance is one of the best short-term indicators for prices, suggesting that

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Links 19 February 2019

Global Macro / Markets / Investing: Bill Gates Says Taxing Capital Gains Is the Best Way to Tap Big Fortunes – Bloomberg Foreign selling of U.S. Treasuries in December hits record high -data – Reuters Pricing algorithms can learn to collude with each other to raise prices – Tech Review The risky ’leveraged loan’ market

10

WA Government wants bigger slice of foreign student-migration rort

By Leith van Onselen Late last year, the Western Australian McGowan Labor Government sought to expand the skilled migration list to entice more foreign students to the state: Premier Mark McGowan said the government would focus on marketing WA as an “international education destination” while adding dozens of jobs to the skilled migration list to

18

Gittins: will re-regulation go too far?

By Leith van Onselen Back in September, Fairfax’s Ross Gittins penned an excellent article lamenting the neoliberal obsession with deregulation and privatisation of public services: A key part of the era of what we used to call “micro-economic reform” has been to take services formerly provided by governments – and sometimes charities – and pay

58

Alan Kohler: Apartment settlement risk casts dark shadow over economy

By Leith van Onselen With a near record level of apartments still under construction across Australia: Concentrated in Sydney and Melbourne: The Australian’s Alan Kohler has sounded the alarm: Deposits are typically 10 per cent. Sydney dwelling prices, on average, have now fallen 11.1 per cent; some places more, some less. The average decline Melbourne,

9

Mortgage broker locusts swarm politicians

By Leith van Onselen The mortgage broker locusts continue to swarm politicians over the Hayne Royal Commission’s recommendation to overhaul mortgage broking from a commission-based to a user-pays system. The head of the country’s biggest retail mortgage broker, Aussie Home Loans chief James Symond, is mobilising brokers across Australia to lobby politicians to retain the

25

Are Chinese about to desert Australia’s unis?

By Leith van Onselen Back in December, the higher education program director at the Grattan Institute, Andrew Norton, warned that Australia’s universities have become dangerously reliant on Chinese students. This warning came after a near doubling of international student arrivals over the past five years: Many of whom have come from China: Which has helped drive

20

Westpac profit flatlines as 90+ day mortgage arrears surge

By Leith van Onselen Westpac has announced its Q1 trading update, which revealed a flat profit result: Westpac also posted a slight uptick in mortgage delinquencies: However, 90+ day delinquencies rose sharply, driven by WA: Whereas the share of interest-only mortgages fell sharply to 32% from 46% in September 2017:  

18

Labor to axe first home buyer super scheme

By Leith van Onselen With the East Coast property bubble raging, the Turnbull Government in October 2017 passed legislation to allow first-home buyers (FHBs) to use up to $30,000 of voluntary super contributions for a housing deposit. The scheme was announced as part of a ‘housing affordability’ package announced in the 2017 Federal Budget: Now, Labor

1

Credit Suisse: Labor Government positive for wage growth

By Leith van Onselen Credit Suisse has warned that a Shorten Labor Government would result in “cascading” wage increases and an increase labour’s share of national income. From The Canberra Times: “We believe the ALP’s package of employment and industrial relations policy reform would represent a transformative shift in the bargaining power of labour in

24

How Australian unis game Australia’s visa system

By Leith van Onselen Last month, the Victorian Government called for a review of entry requirements into Australian universities after growing evidence had emerged that foreign students with poor English language proficiency are badly eroding education standards and placing undue strain on lecturers and university staff. This was immediately followed by academics admitting to Fairfax that

33

Sydney annual house price falls bust through 10%

By Leith van Onselen The weekend ushered in another ominous milestone for Sydney’s housing market, with annual value falls busting through 10%: Here’s how Sydney’s annual value declines look on a chart: As you can see, the pace of losses has accelerated, which is shown more clearly on the quarterly chart where losses are running

16

Auctions clearances firms on weak volumes

CoreLogic released its preliminary auction report yesterday, which reported another seasonal rebound in clearances on low volumes. The preliminary national auction clearance rate was just 47.8%, way below the 62.0% recorded in the same weekend of last year: Auction volumes nationally were just 1,444 – well below the 1,992 recorded in the same weekend last

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Links 18 February 2019

Global Macro / Markets / Investing: Time to Panic – NY Times Tech Stock Bubbles In the 17th Century – Bloomberg Amazon paid no federal taxes on $11.2 billion in profits last year – Washington Post Fed Will Probably Change Its Approach to Inflation, Dudley Says – Bloomberg Amazon Isn’t Interested in Making the World

14

If you don’t want urban sprawl, don’t run high immigration

By Leith van Onselen Today, the Victorian Government will announce that it is rezoning 50,000 housing blocks and creating 12 new suburbs in Melbourne’s key growth zones in order to cater for Melbourne’s bulging population. The areas that will be opened up for development are: Beveridge North West Wallan South Wallan East Merrifield North/Kalkallo Basin