Unconventional Economist

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Do PPPs have a future?

The below article, which has been cross-posted from The Conversation, examines the future of toll road Public-Private Partnerships (PPPs) in Australia. The author is Dr Stephen King, who is an Economics Professor at Monash University. BrisConections has been placed into administration only seven months after opening the Brisbane Airport Link toll road/tunnel. It has not

76

Mortgage Choice lobbies for FHB ponzi scheme

By Leith van Onselen Publicly-listed Australian mortgage broking firm, Mortgage Choice, has taken self-interest to another level in the wake of the sharp fall in first home buyer (FHB) mortgage demand, whereby the proportion of mortgages to FHBs fell to the lowest level since June 2004 following the recent cancellation of grants to first-time buyers

32

How a property shortage can turn to surplus

By Leith van Onselen ‘Underlying demand’ (or ‘pent-up’ demand) is the common method used in calculating whether there is a housing shortage. Put simply, underlying demand estimates what the demand for newly-built housing might be given the growth in population, trends in household size, demand for second (or holiday) homes, and economic conditions (e.g. employment,

9

Weekly RP Data house price update

By Leith van Onselen In the week ended 21 February 2013, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, recorded a 0.01% increase, which followed las week’s 0.16% increase (see next chart). Value gains were driven by Melbourne and Brisbane, which more than offset falls in the

14

The future of retirement

By Leith van Onselen HSBC earlier in the week released a detail survey entitled The Future of Retirement: A new reality, which analyses global retirement trends. The survey findings are based on a representative online survey of 15,000 people in 15 countries, and covered people of working age (25 and over) and those in retirement. The

57

Why have a flat tax on super?

Please find below an interesting post from economist, Matt Cowgill, questioning the merits of taxing superannuation at a flat rate. Be sure to also check out Matt’s blog, We Are All Dead, which examines a wide range of political and economic policy issues. I can understand why libertarians might favour a flat tax on superannuation

86

Melbourne sinks deeper into house-and-land bog

By Leith van Onselen Oliver Hume has released some worrying statistics for Melbourne’s house-and-land market. From Property Observer: According to the latest quarterly report from Oliver Hume, there has been a 29% increase in the number of residential projects being marketed on Melbourne fringes since 2006 with the real estate group forecasting 160 active projects

64

No, the CBD is not the driver of jobs

By Leith van Onselen Much of Australia’s planning policies are based on the presumption that the bulk of the population commutes to the central core for employment. As such there is the desire by planners to limit urban sprawl, which is believed to reduce overall commuting times, resource use and pollution, and the need for

36

Distressed property listings on the rise

By Leith van Onselen Colliers International has released research today showing a big jump in distressed property listings in the second half of 2012, with further increases expected in 2013. From Property Observer: Distressed property listings surged 36% in the second half of 2012 on the back of 5,207 companies going into external administration in

44

The boom & bust of British housing

By Leith van Onselen In Monday’s PowerPoint Presentation on Housing supply & price volatility, I included a chart showing the extreme price volatility of housing in the UK, where prices have experienced four boom and bust cycles since 1970. (see next chart). As noted previously, tight planning restrictions have been in place in the UK

44

Fracking the country side

By Leith van Onselen Technological advancement and the shale gas revolution currently underway in the United States has encouraged other countries to seek to extract natural gas trapped in shale rocks or coal seams via the process of hydraulic fracking. This process essentially involves drilling and inserting a pipe deep into the ground and then

12

Rental vacancies tighten

By Leith van Onselen SQM Research has just released rental vacancy rates for January, which registered a sharp fall from December as the traditional Christmas seasonal uplift disipated (see next table). At the national level, residential vacancies declined by 0.4%, coming to a total of 54,156 homes. However, the vacancy rate was 0.1% higher than

156

Sweden shows Australia the way out

By Leith van Onselen Sweden’s housing market shares a lot of simularities with Australia. As was the case in Australia, Sweden’s financial system was deregulated in the mid-1980s, which led to a house price boom and then corrrection as the Swedish economy entered recession in the early-1990s. However, whereas Australia’s banking system was almost brought

6

New car sales retrace

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released new motor vehicle sales for the month of January, which registered a seasonally-adjusted -2.4% fall in sales over the month but a 10.8% increase over the year: In seasonally adjusted terms, six of the eight states and territories posted a decrease in sales.

76

MB presentation: housing supply & price volatility

By Leith van Onselen Please find below a PowerPoint presentation entitled Housing Supply & Price Volatility that I presented last Thursday to a mortgage risk roundtable in Melbourne. The presentation discusses how markets with unresponsive (inelastic) land/housing supply tend to suffer from higher house price volatility and bigger boom and bust cycles than markets where land/housing

10

Auction clearance rate solid

By Leith van Onselen The Real Estate Institute of Victoria (REIV) yesterday released its preliminary auction results for the weekend just gone, which registered another solid result, with a preliminary clearance rate of 70% recorded on 437 auctions reported to the REIV. This compares to last week’s preliminary clearance rate of 69% from 204 auctions,

23

The mismanaged boom

By Leith van Onselen Yesterday, ABC Radio National broadcast an interesting show entitled Policy Focus: The Mining Boom Economy, which featured George Megalogenis (author, political commentator and columnist at The Australian),  Nicholas Gruen (CEO, Lateral Economics), and Paul Bloxham (Chief economist for HSBC in Australia and New Zealand) questioning the underlying strength of the Australian

14

Links 18 February 2013

Here’s a list of things Reynard read over night. Global Macro/Markets: Austerity doesn’t work when everyone does it at the same time – Paul Krugman Swan calls for debt-led recovery at G-20 – The Australian Pursuing growth: Enough on its own? – oecdinsights.org With the world watching, Bernanke gives a go-ahead to the currency war

30

A commodity shock for incomes

By Leith van Onselen Last year, the Australian Treasury released research showing that around half of the growth of average incomes experienced over the 2000s was caused by the one-off rise in the terms-of-trade (commodity prices), and that income growth and the economy would face stiff headwinds in the future as the terms-of-trade unwinds (subtracting

63

Supply-side squeezes UK first home buyers

By Leith van Onselen Earlier this week, the UK Government released its English Housing Survey 2011 to 2012, which provided some sobering data about the situation facing first home buyers (FHBs). According to the Survey, the rate of home ownership has slumped to 65.3%, which was the seventh consecutive yearly fall and represented the lowest

1

A confidence lift for housing?

By Leith van Onselen Wednesday’s solid rise in the Westpac-Melbourne Institute Consumer Sentiment Index was a welcome sign for the housing market, which has struggled to gain momentum despite -1.35% of cuts to mortgage rates since November 2011. The Consumer Sentiment index jumped 7.7 points to 108.3, which was the highest reading since December 2010

89

Texas wins on housing

By Leith van Onselen Trulia yesterday published an interesting article on how thousands of Californians are emigrating to other states due to exorbitant housing costs, with many choosing to settle in Texas: A constant debate in California politics is whether jobs and people are leaving the state… Here are the basic facts. In 2011, 562,000