Leith van Onselen


Fitch warns Australian banks on wholesale funding

By Leith van Onselen Fitch Ratings agency has today warned Australia’s banks that that they need to improve their funding mix if they are to meet Basel III liquidity requirements and retain their coveted AA- credit ratings: Fitch Ratings-Sydney/Singapore/London-09 May 2013: Australian banks need to continue to improve their funding mix to meet Basel III


Links 10 May 2013

Global Macro/Markets: Big Banks Push Back Against Tighter Rules – Wall Street Journal Blame bond markets, not politicians, for austerity – Financial Times Junk bonds now yield less than Treasurys did 6 years ago – MarketWatch North America: Fannie Mae to Send $59.4 Billion to U.S. Treasury – Wall Street Journal Why is the man


HIA pleads for urgent action on housing policy

By Leith van Onselen Today, the Housing Industry Association (HIA) has issued a Media Release pleading for urgent action on housing policy: The Housing Industry Association (HIA) has today launched its 2013 federal election policy platform, titled Housing Australians. The compendium of 50 actions is directed towards reinvigorating the Australian residential building industry and addressing


Mirvac: We paid too much for land

By Leith van Onselen Developer Mirvac today released its Q3 operational update and strategic review, which confessed that the company has been hurt by: paying too much for residential land; inappropriate deal structures; creating too much higher end product in shallow markets; and proceeding to build for reasons unrelated to market fundamentals. Mirvac also revealed


Employment in detail

By Leith van Onselen As summarised earlier by Houses & Holes, the Australian Bureau of Statistics (ABS) has released labour force data for the month of April, which reported no change in the the headline unemployment rate (i.e. still 5.5% after March’s figure was revised down from 5.6%),  but a seasonally-adjusted 50,100 (0.4%) increase in


REIA recycles negative gearing myths

By Leith van Onselen The Real Estate Institute of Australia (REIA) has today issued a media release (below) defending negative gearing and lobbying against any changes. Let’s examine the REIA’s arguments: The Real Estate Institute of Australia President, Mr Peter Bushby, says the Government should retain negative gearing for property investment in its current form.


Navigating the RBA chart pack

By Leith van Onselen The Reserve Bank of Australia (RBA) yesterday released its monthly chart pack. The Pack (provided in full below) has 16 categories covering the state of the Australian and world economies, via diverse metrics and observations. I have reorganised the key charts as follows. Economic growth and employment: The main (but flawed)


Links 9 May 2013

Global Macro/Markets: The most important story in global economics nobody is paying attention to – Washington Post Why Old Hedge Fund Managers Hate Bernanke – Business Insider Difference Between Trading And Economics – tumblr.com Inflation is falling everywhere – Financial Times Avg. Junk Bond Yield Falls To 4.97% – Income Investing – Barron’s OTC derivatives


Bogan exodus sets new record

By Leith van Onselen Yesterday’s overseas short-term arrivals and departures figures for Market provided a mixed blessing for Australia’s tourism industry, with the number of inbound and outbound tourists jumping sharply over the month. The number of short-term visitor arrivals increased by a seasonally-adjusted 2.3% in March, however, this was more than offset by a


RBNZ implements macroprudential mortgage limits

By Leith van Onselen It has been well documented on this site that the New Zealand housing market is, once again, facing bubble-like conditions, with prices in its two major markets – Auckland and Christchurch – rising strongly on the back of low interest rates, increasing credit availability, and tightened supply (see next chart). A


Victoria pins budget on property recovery

By Leith van Onselen The Victorian Government yesterday released the State Budget for 2013-14, which included the following headlines: Operating surplus of $225 million in 2013-14. Government infrastructure investment program of $6.1 billion in 2013‑14, including transformational investments in East West Link – Stage 1, the Port of Hastings, road, freight and public transport. Delivering the new Bendigo, Monash Children’s and


Links 8 May 2013

Global Macro/Markets: Dow 15000: What it Means, What it Doesn’t Mean – MoneyBeat – WSJ – Wall Street Journal Hedge fund chief Paulson a big loser in gold rout – Reuters Paulson Said to Lose 27% in Gold Fund Last Month in Rout – Bloomberg Subprime bond bounces back, leaving behind a subprime borrower –


NAB passes on full 0.25% rate cut

  From Property Observer: National Australia Bank today announced it would cut its standard variable home loan rate by 0.25%p.a. to 6.13%p.a… The new rate is effective from Monday 13 May. NAB will also reduce its rate on standard variable business rate lending products by 0.25%p.a. UBank, backed by NAB, also announced it would cut


RBA cuts interest rates by 0.25%

By Leith van Onselen Just in, the RBA has cut the official cash rate to a record low 2.75%, effective 8 May 2013, on the back of lower than expected inflation in the March quarter and the stubbornly high exchange rate. Here’s the RBA’s statement: Statement by Glenn Stevens, Governor: Monetary Policy Decision At its


Temporary immigration booms

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released visitor arrivals and departures data for the month of March, which revealed surging net temporary migration into Australia, but falling net permanent migration. In the year to March 2013, permanent and long-term arrivals into Australia hit their highest ever level of 671,130 people,


Retail sales in perspective

By Leith van Onselen Yesterday’s retail sales data left a question market over whether retail sales are staging a solid recovering after a prolonged period of weakness, or just another ‘dead cat bounce’. While a -0.4% fall in retail sales was recorded in March, sales over the prior two months had been strong, meaning that


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 5 May 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;


Boral signals a forlorn hope for the RBA

By Leith van Onselen In February, the Australian Bureau of Statistics (ABS) released construction materials volumes data for the December quarter of 2012, which showed continued weakness in the production of concrete blocks, clay bricks, plasterboard, and roof tiles – materials typically used in housing construction. The Data released by the ABS is not seasonally-adjusted


Links 7 May 2013

Global Macro/Markets: US regulators eye Bitcoin supervision – Financial Times The Oil and Gold Booms Are Over – Bloomberg U.S. Treasurys Defy Bearish Calls – Wall Street Journal Lessons can be learned from Reinhart-Rogoff error – Washington Post North America: FRB: Senior Loan Officer Opinion Survey: January 2013 – Federal Reserve FRBSF: Crises Before and


Price deflation hits retail

By Leith van Onselen As noted earlier today, retail sales figures from the Australian Bureau of Statistics (ABS) revealed a -0.4% fall in the value of retail sales in March, with sales up by 1.6% over the quarter and by 3.2% over the year (see next chart). However, the ABS also provided quarterly data on


Apartments join Melbourne’s discount war

By Leith van Onselen I have written previously how Melbourne’s developers have been offering extraordinary incentives in a bid to stimulate sales of house and land packages. Now it appears the madness has spread to inner city apartment developers, which are offering big incentives to clear rising inventories amid Melbourne’s burgeoning apartment construction boom (see


Retail sales fall back in March

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released retail sales figures for the month of March, which registered a seasonally-adjusted -0.4% decrease over the month versus an expected 0.5% rise. Annual sales growth clocked in at 3.2% (3.4% trend): Retail sales have been relatively weak in the southern states and


Victoria embraces austerity

By Leith van Onselen Back in December, I warned that the Victorian Government would pursue further austerity measures in a bid to sure-up government finances, but that such moves risk weakening the already fragile economy: With budget revenues continuing to fall, there is now the risk that the state government will make further cuts to


Leith van Onselen on Radio National

By Leith van Onselen Last week, I gave the above 10 minute interview to ABC Radio National’s Counterpoint program, which is hosted by former senator for South Australia, Amanda Vandstone. The interview is based on a recent blog post entitled Is this as good as it gets, and discusses the end of Australia’s mining boom


Links 6 May 2013

Global Macro/Markets: Keynes, Keynesians, the Long Run, and Fiscal Policy – New York Times Economic View – What Would Keynes Have Done? – New York Times The Layman’s Case Against Austerity – neweconomicperspectives.org North America: Housing Starts and the Unemployment Rate – Calculated Risk Jobs report pushes stocks to record high – NY Post Why