Unconventional Economist


Developers go completely mad!

By Leith van Onselen In November last year, I wrote an article entitled The house and land value trap, which described the extraordinary incentives being offered by Australia’s housing developers in order to stimulate sales of house and land packages. Today, Property Observer has provided a comprehensive list of incentives being offered by developers in


Housing ignores Swan, RBA

By Leith van Onselen The AFR quotes Wayne Swan this morning confirming that the Government’s budget strategy has been driven by the objective of lowering interest rates: “We’ve . . . engineered a macro rebalancing from fiscal to monetary ­policy…Our spending restraint has given the RBA scope to reduce interest rates over the past year or so, which is


Vic residential values hit $1 trillion!

By Leith van Onselen The Real Estate Institute of Victoria (REIV) yesterday published an article claiming that Victorian residential property values surpassed $1 trillion for the first time in 2012: Property is a significant part of the Victorian economy and holds a large portion of the state’s overall wealth. This is documented every two years


NSW FHB mortgage demand hits 20-year low

By Leith van Onselen Yesterday’s housing finance release from the Australian Bureau of Statistics (ABS) revealed a sharp contraction in first home buyer (FHB) mortgage demand following the October 2012 expiry of first home buyer grant subsidies on pre-existing dwellings in New South Wales and Queensland, as well as the 1 July 2012 expiry of


Housing finance rolls over in November

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released housing finance data for the month of November, which registered a seasonally-adjusted -0.5% decrease in the number of owner-occupied finance commitments over the month. Analyst’s had expected a seasonally-adjusted rise of 0.5%: Arguably, the most important figure in the release is the


A FHB bounce for new housing?

By Leith van Onselen Over the weekend, the Australian Financial Review (AFR) ran an article suggesting that a recovery in first-home buyer (FHB) new home sales is afoot following the changes to FHB grants in New South Wales and Queensland, which in October 2012 ended the FHB grant on pre-existing dwellings in return for more


NAB forecasts 2.25% cash rate by year’s end

By Leith van Onselen NAB today released its official interest rate forecasts for 2013, whereby it is forecasting that Australia’s cash rate will fall by -0.75% to 2.25% by the September quarter of 2013, due to the weakening domestic economy. From NAB’s release: With the economy continuing to weaken and unemployment set to rise noticeably


Howard’s legacy questioned by IMF

By Leith van Onselen Fairfax’s Peter Martin has today published an interesting summary of Internationally Monetary Fund (IMF) research, which questions the commonly held view that the Howard Government were sound fiscal managers. From the SMH: AUSTRALIA’S most needlessly wasteful spending took place under the John Howard-led Coalition government rather than under the Whitlam, Rudd


The chasm in Australian employment statistics grows deeper

By Leith van Onselen Yesterday, John Black, former Labor senator and present chief executive of Australian Development Strategies, wrote an interesting critique of the employment picture painted by the Australian Bureau of Statistics’ (ABS) official labour force data. From the AFR: The days of being able to rely on the unemployment rate to take the


Despite pick-up, housing construction remains in the doldrums

By Leith van Onselen New home sales and dwelling approvals data released this week has been hailed by some commentators as signs that Australian housing construction has finally turned the corner after experiencing recessionary type conditions over the past few years. While the uptick in both sales and approvals over the past few months is


We were wrong: IMF report details the damage of austerity

From The Conversation comes the below article on the IMF’s recent about-face on fiscal austerity. The author, Remy Davidson, is Jean Monnet Chair in Politics and Economics at Monash University. In a rare volte-face, the International Monetary Fund this week admitted that it grossly underestimated the impact of the austerity regime it advised Europeans to


Fitch: Australian housing still least affordable

By Leith van Onselen In a clear broad-side to the Reserve Bank of Australia (RBA), which argues that Australian housing values are not out of line with many comparable countries, Fitch credit ratings agency claims that Australian housing remains amongst the most expensive in the world. From Property Observer: Australian housing affordability has improved markedly


Apartment surge drove dwelling approvals higher in November

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released the Building Approvals data for the month of November. At the national level, the number of dwelling approvals rose by a seasonally adjusted 2.9% to 13,307, driven predominantly by a 10.1% increase in approvals for private sector units and apartments. Consensus was


Public service job cuts continue to bite

By Leith van Onselen Fairfax’s Peter Martin has an interesting take this morning on yesterday’s disappointing ABS job vacancies release, whereby the total number of job vacancies fell to the lowest level in 30-months. From the Age: AUSTRALIA’S supply of vacant jobs is dwindling, making it harder to find work than it has been in


Retail sales in perspective

By Leith van Onselen Yesterday’s disappointing retail sales data, which registered a -0.1% fall in retail sales in November, undershooting the market’s expectations of 3.0% growth over the month, is arguably further confirmation that the -1.75% of cuts to official interest rates since November 2011 is failing to gain traction. After bottoming through 2010 to


ABS job vacancies fall to 30-month low

By Leith van Onselen The Australian Bureau of Statistics (ABS) this morning released job vacancies data for the November quarter, which continued their downward trend: Total job vacancies in November 2012 were 169,900, a decrease of 2.2% from August 2012. The number of job vacancies in the private sector was 157,700 in November 2012, a


New home sales lifted in November but still lowest annual sales on record

By Leith van Onselen From the Housing Industry Association (HIA) today comes news that new homes sales are staging a tentative recovery, particularly in the detached house segment. Total new home sales rose by 4.7% in November driven by 7.7% lift in detached house sales, whereas sales of multi-unit homes (apartments) fell by 6.9% following


Iron ore prices twirl higher

By Leith van Onselen The biggest news over the festive break was the ongoing surge in iron ore prices, which have risen by more than $US30 per tonne since December. Iron ore is Australia’s biggest export commodity (see below chart) and any increase in prices flows directly into national disposable income, boosting company profits, government


2013 housing outlook

By Leith van Onselen On 7 January, Today Tonight provided a surprisingly good report on the outlook for the Australian housing market in 2013. The video, which is provided below, provides a good summary of the year end RP Data-Rismark house price results and contains interviews with Professor Steve Keen, RP Data’s Cameron Kusher, APM’s


Reaction to trade data

By Leith van Onselen Following on from my earlier post on November’s goods and services trade data released today by the Australian Bureau of Statistics (ABS), please find below ANZ Bank’s take: Australia’s trade deficit widened by more than expected in November to AUD2.637bn (mkt: AUD2.3bn). However, the miss relative to market expectations can be


Australia’s trade deficit widened further in November

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released trade data for the month of November, with Australia’s trade deficit increasing to a seasonally-adjusted $2,637 million, from $2,443 million in October (revised upwards from $2,088 million). It was the eleventh consecutive month that Australia has recorded a monthly trade deficit and


Holiday season data dump

By Leith van Onselen If you are like me and have just returned from holidays, you might be unaware that a bunch of data pertaining to the Australian economy was released over the holiday break. Below is a summary of the main data sets: RP Data-Rismark home values indices: As noted last by Delusional Economics