Leith van Onselen

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The virus we had to have

Scott Morrison yesterday warned more Australians will likely lose their jobs after the unemployment rate jumped to 7.1% in the recession “we shouldn’t have had to have”. The Prime Minister’s statement to the House of Representatives evoked Paul Keating in describing the recession, saying it would never have happened without COVID-19. While the COVID-19 shutdown

51

CoreLogic weekly house price update: Plunging

In the week ended 18 June 2020, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.21%: It was the sixth consecutive weekly decline. The falls were driven by Melbourne, Sydney and Perth: Quarterly dwelling value growth is negative, driven by Melbourne: Annual price growth remains strong,

27

Links 19 June 2020

Global Macro / Markets / Investing: ‘The dollar is going to fall very, very sharply,’ warns prominent Yale economist – Market Watch Stock-market legend who called 3 financial bubbles says this one is the ‘Real McCoy,’ this is ‘crazy stuff’ – Market Watch AI isn’t magical and won’t help you reopen your business – WSJ

2

Australians growing more confident, but also more financially stressed

Melbourne Institute’s latest ‘Taking the Pulse of the Nation’ survey, which shows that Australians are growing more confident of an economic recovery, although financial stress is rising: Although the majority of Australians remain pessimistic about the state of the economy, expectations are shifting towards a return to a “new normal” sooner rather than later. In

4

Urban electorates hardest hit by COVID-19

The Grattan Institute has released research showing that electorates in urban areas are now the hardest hit by the COVID-19 economic shock, with Sydney and Melbourne hardest hit: Our previous analysis of job losses to mid-April showed that rural electorates, particularly those in Queensland and NSW with large tourism industries, had lost a greater share

43

BIS: Immigration collapse will decimate property market

BIS Oxford managing director, Robert Mellor, believes that the collapse in immigration will decimate Australia’s property market: “Whether it’s zero or close to zero the number has plummeted,” Mr Mellor said. “So we are forecasting a drop in migration of about 60,000 this financial year and another 150,000 next financial year.” With about 2.7 people

8

Inside Australia’s jobs massacre

As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for May, which registered a further 227,700 fall in total employment, which follows April’s 607,400 decline. Meanwhile, Australia’s unemployment rate surged by 0.7% to 7.1% despite the participation rate falling further: Again, total employment collapsed by a seasonally adjusted 227,700

4

High rise apartments collapse into black hole

The past decade witnessed the biggest ever high-rise construction boom in Australia’s history, driven by Australia’s three largest cities: However, according to BIS Oxford Economics and others, the sector is headed for an epic bust, with apartment starts likely to fall to less than one-third of their former heights: …the industry, which started 69,600 apartments

54

Queensland flags extension of border closure

Queensland Premier Annastacia Palaszczuk has flagged that the state would remain closed to New South Wales and Victorian tourism until their COVID-19 cases are brought under control: Queensland Premier Annastacia Palaszczuk has said her state borders will remain shut “while there is active transmission”, putting some doubt on a July 10 reopening. Speaking in state

29

Australia faces housing “time bomb”

Chris Martin, a housing policy researcher at the University of NSW, has warned that Australia’s housing market is facing a “time bomb” as COVID-19 rental laws expire and welfare benefits are halved: [Martin] said it was likely many tenants would be required to start paying back rent arrears they had accumulated when they reached the end

7

NZ GDP collapsed 1.6% in Q1

Statistics New Zealand has released its national accounts data for the March quarter, which reported a heavy 1.6% fall in real GDP – the largest fall in 29 years – with per capita GDP crashing 2.2%: Gross domestic product (GDP) fell 1.6 percent in the March 2020 quarter, the largest drop in 29 years, as

97

International students will be flown into Australia from July

While Australians are blocked from travelling abroad until next year, and travel around Australia remains restricted, our universities will begin importing small batches of international students from next month: More than 300 foreign students are set to be flown into Canberra next month and quarantined in hotels to help revive Australia’s hammered education industry… The

12

NSW stamp duties hammered by COVID

According to the NSW Office of State Revenue, stamp duty receipts have begun to fall as both property prices and transfers recede. Annual stamp duty receipts in May fell by $83 million (1.5%) from April and have clearly hit a turning point: This decline in stamp duties was driven by falling property transfers, which fell

5

Job postings continue to rebound

Callam Pickering, economist at global jobs site Indeed, has updated his job postings series, which has recorded further improvement. New job postings – defined as those on Indeed AU for 7-days or less – have more than doubled from their mid-April low: Total job postings are tracking 45% below last year’s trend, compared to 48%

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Links 18 June 2020

Global Macro / Markets / Investing: Millennials Born In 1980s May Never Recover From The Great Recession – CNN Low Unemployment Isn’t Worth Much If The Jobs Barely Pay – Brookings ‘The dollar is going to fall very, very sharply,’ warns prominent Yale economist – MarketWatch Americas: National Debt Growing at Roughly $1 Trillion a

1

Tony Makin spouts more austerity drivel

Griffith University professor, Tony Makin, has a long history of attacking government fiscal intervention in the economy. As noted by Ross Gittins, Makin is “the go-to guy for anyone who’d like an independent report asserting that fiscal policy doesn’t work – never has and never could”. Predictably, Makin was a harsh critic of the Labor

2

Industry fund’s superannuation lies exposed

As we know, industry superannuation funds have regularly attacked research suggesting that increasing the superannuation guarantee (SG) would cost wage rises and has incessantly lobbied to raise the SG to 12%. Earlier this week, it was revealed that a “not for citation” paper prepared by Industry Super Australia (ISA), which analysed two decades’ worth of enterprise

3

ScoMo’s HomeBuilder “bad economics”

The Grattan Institute has continued its noble attack of the Morrison Government’s HomeBuilder subsidy for new homes and renovations, labelling it “bad economics”: The $688 million program offers $25,000 cash grants for homeowners to upgrade or build their homes in a bid to support the residential building industry through the pandemic. Owners are required to

14

Proof government grants inflate house prices

Last week, the Western Australian Government piled in behind Scott Morrison’s HomeBuilder program, offering a $20,000 non-means tested subsidy to all purchasers of a newly constructed dwellings. Along with other available subsidies, this meant that first home buyers could ‘save’ around $60,000 on the cost of a new home, broken down as follows: $25,000 HomeBuilder;

3

Greedy universities urge return to failed demand-driven system

Australia’s greedy university sector are demanding the federal government restore the failed demand-driven system to allow universities to soak up unemployed young Australians: Universities face turning away hundreds of thousands of students next year as applications to study surge but available places remain fixed… Professor of education policy at Melbourne University Frank Larkins said higher

16

ANZ: Immigration “was never a sustainable source of growth”

ANZ economists believe there is a “slim” prospect of a population-driven recovery for the New Zealand economy given the weak outlook for migration. They also claimed that immigration “was never a sustainable source of growth” anyway: This crisis has turned New Zealand’s recent model of migration-driven growth on its head… Once borders reopen, we expect

13

First home buyers crunched by COVID

Despite home prices falling across Sydney and Melbourne, the proportion of homes available priced below $700,000 has shrunk, according to Domain: In Sydney, only 30 per cent of listings fell under the $700,000 threshold during May, according to Domain data. That is a 6 percentage point drop in listings compared to May last year. The

7

NBN fights competition wars on all fronts

The poor value of Australia’s National Broadband Network (NBN) has spurred an army of companies offering lower cost or better performing alternatives. On Monday, The AFR reported that a new billion-dollar telco has emerged to take on NBN: The team behind the merger of M2 and Vocus has engineered another major telecoms deal, bringing together

41

Craig Emerson spins immigration lies

Former Labor Party MP, Craig Emerson, is the latest shill demanding an increase in Australia’s immigration intake to propel the economy out of its COVID-19 slump. Let’s examine his key arguments: Before the COVID-19 crisis, two-thirds of Australia’s economic growth in recent years had come from population growth. And two-thirds of population growth had come

14

Australian housing valuations hits a double top

The ABS yesterday released its property price data for the March quarter, which valued Australia’s dwelling stock owned by households at $6.91 trillion, whereas the total housing stock was valued at $7.24 trillion. As shown below, the total value of Australia’s dwelling stock owned by households was 7.3 times employee incomes as at March 2020,

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Links 17 June 2020

Global Macro / Markets / Investing: The Fed says it is going to start buying individual corporate bonds – CNBC Stuck at Home, the World Is Eating Less Sugar – Yahoo A dollar crash is virtually inevitable, Asia expert Stephen Roach warns – CNBC ‘Peak’ Private-Equity Fears Are Spreading Across Pension World – Bloomberg Stocks

1

ABS: Property prices rose pre-COVID

The Australian Bureau of Statistics (ABS) has released its property price indices for the March quarter – incorporating both detached houses and units – which registered a solid 1.6% quarterly rise in home values, driven by Melbourne (+2.1%) and Sydney (+1.9%): The other capitals also experienced positive growth. The ABS also updated its estimated total