Unconventional Economist


Bogan exodus sets another record

By Leith van Onselen Yesterday’s overseas short-term arrivals and departures figures for April were a kick in the guts for Australia’s tourism industry, with the number of outbound tourists jumping to a new record monthly and annual high. The number of short-term visitor arrivals fell by a seasonally-adjusted -1.6% in April, whereas short-term resident departures


Westpac: Aussie economy losing momentum

From Westpac comes the following initial reactions to today’s March quarter GDP release, which it believes strengthens the case for further near term interest rate cuts: Q1 growth printed a fraction below expectations at, 0.6%qtr, 2.5%yr. We had expected growth of 0.7%qtr, 2.6%yr & the revised market median forecast was also 0.7% (downgraded from 0.8%).


Chinese business activity fell in May

HSBC has just released both its May composite PMI and services PMI for the Chinese economy. Looking at the composite PMI first, which covers both the services and manufacturing sectors, HSBC registered a slight fall in the index to 50.9 in May, down from 51.1 in April. The result indicated the weakest expansion in business


GDP in detail

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released the national accounts for the March quarter, which registered a 0.6% increase in real GDP over the quarter and a 2.5% rise over the year. The result was below market expectations of a 0.8% rise. On a per capita basis, however, real GDP


Affordability improving, but FHBs struggle

By Leith van Onselen The Adelaide Bank/Real Estate Institute of Australia (REIA) has today released its quarterly affordability report, which revealed an ongoing improvement in home buyer affordability over the March quarter of 2013, although the number of first home buyers (FHBs) has dropped markedly. Rental affordability also worsened over the quarter. According to the


AFG mortgage applications boom

By Leith van Onselen Australian Finance Group (AFG) yesterday released its housing finance data for the month of May, which registered the Group’s strongest monthly mortgage applications on record, with 8,921 mortgage applications (valued at $3,608 million) processed over the month, an improvement of 16.8% on May 2012 (see next chart). According to the media


UK doubles down on housing disaster

By Leith van Onselen Regular readers will recognise that I am highly sceptical of the UK housing system, which I believe operates world’s worst practice when it comes to social and economic outcomes. A key tenet of the UK’s housing malaise is its dysfunctional supply system, which has become increasingly constipated following sixty years of


Links 5 June 2013

  Global Macro/Markets: ‘Dr. Boom’? Roubini Sees Two Years of Stock Gains – CNBC North America: Behind the Rise in House Prices, Wall Street Buyers – New York Times Weak income growth should hold back US consumer spending – Credit Writedowns Construction Spending in U.S. Increases on Private Building – Bloomberg The Fed and Inequality


ANZ cuts GDP forecast

By Leith van Onselen ANZ Bank has this afternoon released its final preview ahead of tomorrow’s March quarter GDP release by the Australian Bureau of Statistics. The ANZ has lowered its GDP forecast to 0.8% from 1.0% growth over the quarter, with net exports contributing most to growth. ANZ also forecasts solid growth in national


RBA holds cash rate at 2.75%

  From the RBA: Statement by Glenn Stevens, Governor: Monetary Policy Decision At its meeting today, the Board decided to leave the cash rate unchanged at 2.75 per cent. Information becoming available since the previous meeting is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next


Temporary immigration booming

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released visitor arrivals and departures data for the month of April, which revealed surging net temporary migration into Australia, but falling net permanent migration. In the year to April 2013, there were 673,630 permanent and long-term arrivals into Australia, partly offset by 369,460 permanent


Net exports to power GDP

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released balance of payments data for the March quarter of 2013, which registered a big seasonally adjusted fall in the current account deficit (CAD) to $8,510 million, from $14,759 million in the December quarter. The fall in the CAD was driven primarily by


ACT moves to right housing wrongs

By Leith van Onselen In mid-January 2003, just days before bush fires hit the outlying suburbs, my girlfriend (now wife) and I moved to Canberra from Melbourne so that I could commence work as an economist at the Australian Treasury.  Fortunately for us, we had secured rental accommodation in December 2002, so were unaffected by


Weekly RP Data property wrap

By Leith van Onselen Please find below RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 2 June 2013. This week’s report includes: Latest weekly dwelling value results; Latest median house & unit prices; Average time on market & vendor discounts; Auction results & clearance rates;


Moody’s: Australian mortgage arrears worsen

From Moody’s Investor Service: Sydney, June 03, 2013 — Moody’s Investors Service says that Australian prime mortgage arrears worsened in March versus the previous month. As published in Moody’s just-released Global Structured Finance Collateral Performance Review, Moody’s says arrears in excess of 30 days in the Australian prime residential mortgage market were 1.66% in March,


Links 4 June 2013

Global Macro/Markets: Financial system ‘waiting for next crisis’ – Financial Times North America: Speech: Bernanke, The Ten Suggestions – Federal Reserve Deficit Deal Even Less Likely – Wall Street Journal Risk-Averse Culture Infects U.S. Workers, Entrepreneurs – Wall Street Journal Europe: Eurozone’s manufacturing downturn eases in May – BBC A Greek bond raid – Financial


Westpac: Housing recovery uneven

From the Westpac economics team: Australian housing: auction clearance rates hit new highs but price declines continue to point to an uneven recovery. The latest monthly data on Australia’s housing market is a little tricky to reconcile with auction clearance rates hitting new highs in Sydney and recovering solidly in Melbourne, a range of other


The Great Reflation

When it comes to analysing the US housing market, few people have a better track record than Peter Schiff, CEO and chief global strategist at Euro Pacific Capital Inc. In 2005 and 2006, Schiff told over 1000 mortgage brokers that they were about to lose their jobs and, in the process, completely nailed the coming


Full RP Data May house price release

By Leith van Onselen Please find below RP Data’s May house price release, which reveals that dwelling values fell by -1.2% at the national 8-city level, the same as the -1.2% decline announced on Friday at the 5-city level. According to the Media Release: Based on the index results, capital city dwelling values are now


Mineral exploration rises, petroleum exploration falls

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released Mineral & Petroleum Exploration data for the March quarter, which revealed a slight recovery in mineral exploration expenditure following three consecutive quarters of decline. By contrast, petroleum exploration expenditure fell from the all-time high level registered in the December quarter of 2012. Nationally,


Retail sales remain soft in April

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released retail sales figures for the month of April, which registered a seasonally-adjusted 0.2% increase over the month versus an expected 0.3% rise. Annual sales growth clocked in at 3.2% (3.4% trend): Retail sales have been relatively weak in the southern states and


Auckland: the land bankers paradise

By Leith van Onselen In late 2011, I published a detailed article entitled Why developers land bank, which sought to explain the reasons and motivations behind land banking. A central theme of my article was that land banking is often a rational response to regulatory (or other) restrictions on land supply: …land banking – an


Auction clearances strong (updated)

By Leith van Onselen Auction clearance rates in Australia’s two biggest markets – Sydney and Melbourne – were strong over the weekend, with both markets recording solid increases. In Australia’s biggest auction market – Melbourne – clearances rose to 74% on 721 auctions reported to the REIV. Moreover, the result should hold given that only


Uncovering Australia’s sub-prime mortgage lending

By Leith van Onselen Last year, The Australian newspaper published some great articles questioning the commonly held view that Australia’s banking sector is conservative. In April 2012, The Australian uncovered how Australia’s largest banks were being forced to forgive mortgage debts of borrowers granted loans based on falsified or fraudulent information supplied by mortgage brokers.


Hockey: Sell Canberra housing

By Leith van Onselen Last month, I asked whether it was time to sell Canberra housing, based on the Coalition’s pledge to axe 12,000 public servants from the Federal bureaucracy, as well as the potential oversupply of homes stemming from the recent surge in apartment construction. On Friday, Shadow Treasurer, Joe Hockey, also suggested that


Links 3 June 2013

Global Macro/Markets: After the Gold Rush by Nouriel Roubini – Project Syndicate SCHIFF: The Great Reflation – google.com Peter Schiff doubles down on Doomsday views – Capitol Report – MarketWatch Treasuries Loss Is Biggest in 3 Years as Fed Considers Tapering – Bloomberg North America: Little Cause for Inflation Worries – New York Times The