Unconventional Economist

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Mortgage repayments to double for half a million Aussies

Fixed mortgage rates have already ratcheted up, as illustrated in the next chart from CoreLogic: While not captured above, variable mortgage rates have also begun drifting higher following the RBA’s 0.25% hike in the cash rate earlier this month. Steve Mickenbecker from financial comparison site Canstar has warned that around half a million Australians could

37

Walls close in on Australian first home buyers

Corelogic’s 2022 housing affordability report, released last week, showed that aspiring first home buyers are being squeezed hard by surging mortgage payments and rents. While the proportion of income required to service a mortgage remains below record highs, it has risen substantially over the past year across both the capital cities and regions: Moreover, the

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Links 17 May 2022

Global Macro / Markets / Investing: Bitcoin’s 50% crash erases all of Elon Musk’s gains on Tesla balance sheet – Fortune Saudi Aramco Posts Record Quarterly Profit on Surging Oil Prices – WSJ Global Prices Expected To Rise As India Bans Wheat Exports – Says Results of the week of the blockchain industry – Medium

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Australia dives 14 places in World Press Freedom Index

Following Australia’s dive down Transparency International’s Corruption Perceptions Index over the Coalition’s term: Australia has also plunged 14 places in one year in the World Press Freedom Index, from 25th place out of 180 to 39th place: Press freedom is fragile in this island-continent of 26 million people, where ultra-concentration of media ownership, combined with growing

18

Minor parties run policy rings around majors

Prosper Australia has released its 2022 Federal election scorecard, which compares their policy platforms against the major Lib/Lab duopoly. Prosper’s scorecard covers the following key areas of policy, ranked in order of importance: Tax reform – Here we are looking for policy that shifts economic activity from unproductive rent seeking. We are looking for tax

30

Morrison feeds more first home buyers to property meat grinder

Over recent months we witnessed the Coalition and Labor launch a raft of new “housing affordability” policies – from home loan guarantees to shared equity schemes – aimed at driving more first-time buyers into the housing market and propping up housing values. Yesterday, a desperate Scott Morrison announced that if re-elected, the Coalition would allow

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Australia’s housing market braces for record interest rate rise

Freelance journalist Tarric Brooker has authored an interesting article estimating how forecast interest rate rate rises would compare with Australia’s historical experience. Rather than examining raw interest rate increases, Brooker has instead calculated the percentage change in mortgage interest repayments from the trough to the peak of the interest rate cycle. The analysis shows that

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It’s time for a skilled visa overhaul

At the same time as Australia’s business groups are arguing for a real cut in the minimum wage, they are reportedly in a state of “despair over sluggish immigration flows”: Australia’s visa system needs an overhaul to accelerate skilled labour flows… Over the past decade, excluding 2021, permanent long-term visitor numbers averaged 162,000 during the

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Links 16 May 2022

Global Macro / Markets / Investing: Tesla, Twitter shares drop as Elon Musk’s legal issues grow – ABC The Meltdown of ‘stablecoin’ Terra shows an Urgent need for Regulation to Protect Consumers – Guardian Mag How More Than $1 Trillion of Crypto Vanished in Just Six Months – WSJ Stocks Trim Weekly Losses With Friday

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Weekend Reading: 14-15 May 2022

Global Macro / Markets / Investing: Bitcoin’s plunge is hitting the little guy who got into crypto during COVID worst of all – Valkyrie Cryptofunds Twitter freezing hiring and cutting costs as execs depart – CNBC Ruble Surpasses Brazil’s Real as Year’s Best-Performing Currency – Yahoo Disney Plus added almost 8 million new subscribers as

12

Immigration won’t rescue plunging New Zealand housing market

I reported yesterday how the Ardern Government in New Zealand announced some tweaking to the immigration system that will ensure Kiwi businesses have easy access to migrant workers. These changes will also give easy access to permanent residency, thus ensuring that New Zealand’s population continues to grow. For all intents and purposes, the Ardern Government’s

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Labor’s anti-corruption commission lines up Coalition MPs

Labor has indicated that its proposed national anti-corruption commission will be given powers to investigate misconduct retrospectively. Shadow attorney-general Mark Dreyfus has indicated that the commission is likely to have the power to investigate corruption or misconduct that is alleged to have occurred up to 15 years ago. Dreyfus adds that politicians and public servants could

13

“Domino effect” to drive tsunami of home builder collapses

I noted earlier this week how Privium, Condev, ABG Group and Probuild are among the major Australian construction firms that have gone into liquidation over recent months, alongside many smaller builders. An industry insider also warned that the collapses are only the “tip of the iceberg”, given factors such as rising labour and material costs

14

CBA: Next week’s ABS data crucial to RBA’s interest rate decision

By Gareth Aird, head of Australian economics at CBA: Key Points: Next week the ABS will publish the Q1 22 Wage Price Index (WPI) and the April labour force survey. These two data releases are the most important economic information ahead of the June Board meeting. We expect the WPI to increase by 0.8%/qtr in

42

Women are holding the Morrison baseball bats

Roy Morgan polling has identified the precise time when female voters began to switch away from Prime Minister Scott Morrison, with Roy Morgan tracking male and female two-party-preferred outcomes. The switch happened in February 2021, when Brittany Higgins went public about her ordeal and treatment by the Coalition government. While there has been a slight narrowing

9

International students continue to shun Australia

Late last year, 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. According to the

43

Sydney and Melbourne house prices plunge

CoreLogic’s daily dwelling values index, which measures price changes across the five main capital city markets, declined by 0.11% in the week ended 12 May: The decline was driven by Sydney (-0.26%) and Melbourne (-0.22%), which both recorded heavy price falls. By contrast, the other major capitals each recorded price rises, with Adelaide leading: Over

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Links 13 May 2022

Global Macro / Markets / Investing: Stop blaming workers for the Great Resignation–and start looking at the jobs they’re leaving – Fortune Carvana laid off 2,500 employees and chose to do so over Zoom – Engaget Plunge in Crypto-Mining Stocks Deepens as Bitcoin Slumps – Valkyrie Crypto Funds Apple is no longer the world’s most

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Tumbling auction clearances signal steeper house price falls

CoreLogic has released its final auction results for last weekend, with the lowest capital city clearance rate of 2022 recorded and Sydney and Melbourne clearance rates bombing into the 50s: Nationally, a final clearance rate of 61.8% was recorded. Melbourne’s clearance rate (59.8%) fell to its lowest level since mid-September 2021, whereas Sydney (55.3%) recorded