Unconventional Economist


NSW rolls out piss weak social housing fund

By Leith van Onselen The NSW Government has reportedly rolled-out the second phase of its $1.1 billion Social and Affordable Housing Fund (SAHF), which aims to build another 1,000 homes for primarily older residents. The roll-out is part of the Government’s aim to deliver 27,000 social and affordable homes over ten years. From The AFR: The


NSW Election: Gladys Berejiklian pledges $200 retiree bribe

By Leith van Onselen NSW Premier, Gladys Berejiklian, has shamelessly attempted to bribe the grey vote in the lead-up to the upcoming state election, pledging to give self-funded retirees $200 off their power bills. From The SMH: Premier Gladys Berejiklian on Monday said about 130,000 people aged 65 or older who hold a seniors’ health card will


Owner-occupied and investor mortgage lending crashes

By Leith van Onselen The ABS has replaced its housing and lending finance series with a singe new Lending to households and businesses release, which shows that lending to households has crashed on the back of plummeting owner-occupied and investor mortgage lending: According to the ABS: In seasonally adjusted terms, lending commitments to households fell 4.4%


Winner! The dumbest ever negative gearing defence

By Leith van Onselen We’ve hit peak stupid in the negative gearing debate, with Starr Partners CEO, Douglas Driscoll, claiming Labor’s policy will magically lead to an influx of Chinese investment, thereby locking-out first home buyers. From Yahoo Finance: Instead of boosting the volume of first-home buyers in the market, the changes could lead to a


Labor under pressure on super life insurance gouge

By Leith van Onselen At the end of 2018, the Morrison Government failed to strike a deal with the Senate cross-bench to pass a bill that would have seen fees for low-balance superannuation accounts capped at 3% and exempted fund members under the age of 25 from compulsory life insurance. Consequently, younger workers and those


Labor immigration extremists go all in on “Big Australia”

By Leith van Onselen With Australia’s permanent migration program already an insane 180,000 in 2017-18 – more than double the level at the turn of the century: And net overseas migration (NOM) running at more than triple the historical average, which is projected to continue for decades to come: Many of us have been hoping


Sydney’s immigration-crushed west faces dystopian future

By Leith van Onselen Western Sydney is the epicentre of the city’s working class. It is a prime dumping ground for the federal government’s mass immigration ‘Big Australia’ program. And it has become a virtual “special economic zone” where wages can be shredded with impunity by the wealthy owners of capital living in the East.


Property Council PM backs mortgage broker locusts

By Leith van Onselen Prime Minister Scott Morrison gave a National Press Club address yesterday, where he defended the mortgage broking industry against the Hayne Royal Commission’s recommendation to overhaul mortgage broking from a commission-based to a user-pays system: “The mortgage brokers understand, with the cautious way we’ve responded to the report, that we understand


Domain: Sydney landlords crushed by falling rents

By Leith van Onselen Domain research analyst, Eliza Owen, has published a report showing that Sydney’s rental vacancy rate is rising at the same time as rents are falling: The Sydney rental vacancy rate has been trending higher. In January 2019, the rate was 2.8 per cent, up from 1.8 per cent in the previous


Links 12 February 2019

Global Macro / Markets / Investing: Bezos Selfie Controversy Triggers Alarm For Billionaires Worldwide – Bloomberg Wealth concentration returning to ‘levels last seen during the Roaring Twenties,’ according to new research – Washington Post Tesla Is Cranking Out Model 3s—Now It Has to Service Them – WSJ Plummeting insect numbers ’threaten collapse of nature’ –


Household financial confidence dives deeper into abyss

Digital Finance Analytics has released its Household Financial Confidence Index results for January, based on a survey of 52,000 households, which revealed that confidence has fallen to the lowest level in the survey’s five year history: According to Martin North: Looking at the results by property segments, we see a fall in confidence among property


AV Jennings joins housing smash

By Leith van Onselen House and land developer AV Jennings has released its first half results for 2019, which revealed sharp falls in both revenue and profit: The report also pointed to further weakness, and blames “saturated, extreme media coverage”: As previously flagged, market conditions were expected to soften, particularly in Sydney and Melbourne: ➢Price


CoreLogic leading indices signal 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 ready to rocket into the Autumn not-selling season: As shown above, stock levels are at levels not seen since February 2012, and could see record potential stock levels this year. SQM Research’s


Gerard Minack: “A recession in Australia is becoming more likely”

By Leith van Onselen Independent economist Gerard Minack has released a report explaining why he thinks “a recession in Australia is becoming more likely”. In the report, Minack notes a number of downside risks, including: The accelerating decline in dwelling values; The accelerating decline in building approvals; Leading indicators of employment are weakening; and The negative


Alan Kohler: Let mortgage brokers die

By Leith van Onselen The mortgage broker locusts continue to swarm the Hayne Royal Commission’s recommendation to overhaul mortgage broking from a commission-based to a user-pays system. Mark Bouris – executive chairman of Yellow Brick Road – claims that the reforms will kill the mortgage broking industry, erode competition, and drive mortgage rates up: Buying


Minerals Council attacks ALP’s labour hire crackdown

By Leith van Onselen The Minerals Council of Australia (MCA) has attacked Labor’s planned crackdown on labour hire companies, claiming it will reduce its flexibility and make it less globally competitive. From The AFR: The Minerals Council of Australia is urging Labor to temper a planned crackdown on casualisation and labour hire, warning that the


Offshore detention is a horrendous waste of taxpayer money

By Leith van Onselen I have previously argued that Australia is an “anti-humanitarian nation”. This view is based on the following facts. First, Australia’s foreign aid budget has cratered over the past half century: Second, Australia’s permanent migrant intake is incredibly light on humanitarian places – just 16,250 in 2018 – but heavy on so-called


Cheaper broadband coming as NBN faces “inevitable” writedown

By Leith van Onselen The pressure continues to build on the federal government to writedown the National Broadband Network (NBN), with first chief executive of the NBN arguing that it is inevitable following the “disastrous” rollout of the project. From The Canberra Times Mike Quigley, head of NBN Co under the former Labor government, said the


The epic twin crashes of Perth and Darwin property

By Leith van Onselen The boom and bust of Perth and Darwin’s housing markets have been well documented on MB. Prices have fallen sharply since 2014: Population growth cratered just as dwelling construction boomed: Leading to surging rental vacancies: Now, CoreLogic has released research showing that Perth’s and Darwin’s dwelling values have fallen by more


NSW belatedly cracks down on high-rise slum towers

By Leith van Onselen The Opal Tower farce, which saw residents evacuated from the 34-storey structure after huge cracks were discovered, has forced the NSW Government to undertake a major overhaul of high-rise construction. From The Australian: The changes… will ensure that every party to the construction process, from drafting a design to the final build, is


Big states turn immigration gun back on federal government

By Leith van Onselen L-plate Treasurer, Josh Frydenberg, admitted that the Government’s faux concern of immigration late last year was a smokescreen, committing to a turbo-charged migrant intake and a ‘Big Australia’ at Friday’s COAG population meeting. From The Australian: “Our plan is to continue to grow the economy and to continue to have a


Melbourne property losses smash through 9%

By Leith van Onselen According to CoreLogic’s daily house price index, Melbourne dwelling value losses smashed through 9% over the weekend: The below chart shows how Melbourne’s price decline compares against prior price corrections: As you can see, Melbourne’s current property losses are both the second steepest and deepest in nearly 40 years of data.


Are auction clearances rebounding?

By Leith van Onselen Family homes are reportedly “flying” at auctions “as pent-up buyer demand sparks competition”, according to Domain. The fist pumping comes as Domain’s weekly auction report showed a preliminary clearance rate of 52.8%, although there was conveniently no mention that the final result for the week prior was a disastrous 36.9% –


Links 11 February 2019

Global Macro / Markets / Investing: I’ve covered nine financial crises since the 1960s. Here’s what I learned – The Guardian Bezos Selfie Controversy Triggers Alarm For Billionaires Worldwide – Bloomberg The case for an active fiscal policy – VOX Trade war opens commodity floodgates – Nikkei Asian Review Two hundred years of health and


Weekend Reading: 9-10 February 2019

Global Macro / Markets / Investing: Who Wants to Be a Billionaire? – Bloomberg Abolish Billionaires – NY Times Fightback against the billionaires: the radicals taking on the global elite – The Guardian The Good Jobs Challenge – Project Syndicate Americas: Russian-Style Kleptocracy Is Infiltrating America – The Atlantic ‘Too hot to handle’: Pelosi predicts


Experts slam Labor’s dud NRAS 2.0

By Leith van Onselen A conga-line of “experts” have slammed Labor’s $6.6 billion affordable rental scheme, which is aimed at facilitating the construction of 250,000 ‘affordable’ rental dwellings over the next decade. From The Australian: The Grattan Institute’s John Daley said the policy, announced by Bill Shorten at Labor’s national conference in December, would be


Thousands of Victorian buildings have flammable cladding

By Leith van Onselen The fallout from Monday’s fire at the 41-storey Neo200 building on Melbourne’s Spencer Street continues, with Victoria’s Planning Minister, Richard Wynne, reportedly seeking a nationwide ban on combustible cladding, which is present in “thousands of Victorian buildings”. Wynne says the federal government has a major role to play in ensuring that building