Unconventional Economist


How to fix housing for good

By Leith van Onselen Catherine Cashmore published an interesting article yesterday at Property Observer questioning whether house prices in Australia can forever out-pace inflation: …we’re reaching that time of year where real estate pundits will dust off the crystal ball and make some future predictions into 2013 – not that we haven’t had a fair


New housing index to be launched by SQM

By Leith van Onselen Missed this one yesterday.  SQM Research has revealed via the AFR that it will shortly release a new vendor asking price index that will track housing market sentiment by tracking how optimistic sellers are about selling prices. SQM will monitor a number of major real estate classifieds websites, and chart the


Doubts rise around uplift in housing construction

By Leith van Onselen Following on from yesterday’s post questioning whether housing construction can recover enough to fill the void left as the mining investment boom unwinds from 2013, Bank of America Merrill Lynch has written an interesting report also arguing that the recovery in building construction will be “relatively moderate” as interest rates are


Can housing construction fill the mining hole?

By Leith van Onselen Fairfax’s Matthew Kidman has today published an interesting article weighing-up whether housing construction can recover enough to fill the void left as the mining investment boom unwinds from 2013. Let’s take a look: CAN the Australian housing market recover as it has in the past or is it different this time?


Auction clearance rates bounce back in Victoria

By Leith van Onselen The auction clearance rate in Victoria rebounded over the weekend on large auction volumes, although the high number of  undisclosed results is likely to see the clearance rate downgraded over the week as late results are chased-up. The Real Estate Institute of Victoria (REIV) reported a provisional auction clearance rate of


Rental vacancies flat in October

By Leith van Onselen SQM Research has just released rental vacancy data for the month of October 2012, which revealed little change over the month: The key points from the release are: Nationally, vacancies stagnated during October, with a mere difference of 560 vacancies, coming to a total of 49,104 and a national vacancy rate


When demand ain’t what it used to be

By Leith van Onselen ‘Underlying demand’ (or ‘pent-up’ demand) is the common methodology 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,


RP Data November housing market update

By Leith van Onselen Please find above RP Data’s November housing market update, which analyses the nation’s housing market as at the end of October when dwelling values declined by -1.0% over the month. As always, there are some interesting tidbits of information, including: 1. The recent pick-up in sales volumes, which are tracking 15%


Links 15 November 2012

Global Macro: ICAP Tumbles Most in Two Years as First-Half Profit Shrinks 26% – Bloomberg Hoenig: A Better Alternative to Basel Capital Rules – The Big Picture North America: Retail Sales declined 0.3% in October – Calculated Risk Retail Sales in U.S. Decrease for First Time in Four Months – Bloomberg FRB: FOMC Minutes, October


The house and land value trap

By Leith van Onselen Last month, I wrote an article in MacroInvestor entitled Beware the house and land value trap, which examined the pitfalls of buying new house and land packages on the fringes of Australia’s capital cities. The article was particularly critical of measures adopted by Australia’s property developers aimed at reinvigorating new home


QLD home transfers & mortgages blast off

By Leith van Onselen The Queensland Department of Environment and Resource Management (DERM) has released data on housing transfers and mortgage lodgements for the month of October. According to DERM, the number of housing transfers and mortgage lodgements rose by 21.2% and 18.7% respectively in October 2012, and were up 35.9% and 23.9% respectively on


Lending finance lifted in September

By Leith van Onselen The ABS this morning released Lending Finance data for the month of September, which registered solid seasonally-adjusted rises across all categories: In seasonally-adjusted terms, the value of personal finance commitments rose by 2.6% and were up 4.2% over the year: The value of lease finance commitments also rose – up 10.1%


Housing construction data worsens

By Leith van Onselen While housing finance data continues to improve, housing construction data is weakening, with the release of quarterly construction materials volumes by the Australian Bureau of Statistics on Friday showing further weakness in volumes of concrete blocks, clay bricks and roof tiles – materials typically used in housing construction (see below chart).


Housing finance hits two-and-a-half year high

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released housing finance data for the month of September, which registered a seasonally-adjusted 0.9% increase in the number of owner-occupied finance commitments over the month. August’s results were also revised up by 0.4%: Arguably, the most important figure in the release is the


Housing high flyers move to macroprudential rules

By Leith van Onselen Goldman Sachs last week released an interesting report (below) on the stark differences that have emerged across developed country housing markets. The report essentially seperates the preformance of various housing markets into two distinct categories: ‘housing high-flyers’:where real house prices have increased strongly and are up cumulatively since Q1 2009; and


Mortgages, transfers blast off in Victoria

By Leith van Onselen The cash-strapped and stamp duty-addicted Victorian Government might breathe a sigh of relief after Department of Sustainability and Environment (DSE) released data revealing a big surge in housing transfers in the month of October. It was the highest number of October transfers since 2009, with 15,336 homes changing hands, up 26%


Luke warm employment

By Leith van Onselen As reported by the Houses & Holes earlier, the Australian Bureau of Statistics (ABS) has released labour force data for the month of October, which reported a -0.8% decrease in the headline unemployment rate to 5.36% from 5.44% in September, but an increase in the total number of jobs across the


Links 8 November 2012

Global Macro: This Is the Worst Election for Wall Street in Decades – The Atlantic Election gamble backfires for banks, energy firms: Kemp – Reuters Best Rally in Decade May Slow as Obama Faces Congress – Bloomberg Improved access to private sector credit crucial to restoring global growth – AFR North America: Congratulations, Mr. President.


DEEWR leading employment index rises for fourth straight month

By Leith van Onselen The Department of Education, Employment & Workplace Relations (DEEWR) today released its leading indicator of employment (release below), which registered its fourth consecutive monthly rise (see below chart). In its explanation of the result, DEEWR seems fairly cautious in declaring that the employment market is improving: DEEWR’s Monthly Leading Indicator of


Obama wins

By Leith van Onselen Although there are still some undecided states, US Democratic President Barack Obama looks to have been re-elected to a second four-year term, with most major news networks declaring him the winner over Republican candidate, Mitt Romney. A win in the all important swing state of Ohio has helped to push him


Green shoots for Australian tourism?

By Leith van Onselen News continued to improve for Australia’s tourism industry yesterday, with the release of the overseas short-term arrivals and departures figures for September showing a second consecutive monthly lift in the number of inbound tourists and a big increase over the year. Although the number of short-term visitor arrivals increased by only


The cheap energy glut

By Leith van Onselen For decades, coal has been a linchpin of Australia’s export base. Prior to the China-led commodity boom, coal exports – both thermal and coking – accounted for between 10% and 15% of Australia’s total merchandise exports. Until late-2009, coal was also Australia’s biggest export commodity, only recently ceding its advantage to


Retail sales in perspective

By Leith van Onselen Yesterday, my esteemed and learned colleague, Houses and Holes, questioned whether retail sales are accelerating based on the recent improvement of sales growth over the past year. Certainly, retail sales have climbed off the canvass, as illustrated by the below chart showing annual sales growth since 1998. A clear uptrend has


Trade deficit narrows

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released trade data for the month of September, with Australia’s trade deficit narrowing to a seasonally-adjusted -$1,456 million, from -$1,876 million in August. July’s and August’s trade balances were also revised up, from -$1,530 million to -$1,234 million (July), and from -$2,027 million