Leith van Onselen


NZ Government shows the way on housing policy

I have said it before and I will say it again: New Zealand is leaving Australia for dead when it comes to housing policy. Unlike the Reserve Bank of Australia (RBA) and the Australian Prudential Regulatory Authority (APRA), which continue to hose down concerns about risks building in the Australian housing market, New Zealand’s central


Weekly RP Data Australian house price update

By Leith van Onselen In the week ended 26 September 2013, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, recorded a 0.22% rise, which was the fifth consecutive weekly increase (see next chart). Values rose in three major capitals and fell in two (see next chart). Values


Melbourne apartment boom to “implode”

Cross-posted from The Conversation The Melbourne apartment surge is just beginning. In the next few years, an unprecedented number of apartments will hit the city’s already crowded skyline. But our new research shows this does not mean more Victorians are embracing inner-city living; rather it is the result of the marketing of thousands of tiny,


Bank of England urged to curb mortgage lending

By Leith van Onselen The UK housing market looks to be heating-up once again following the implementation of the government’s “Help-to-Buy” shared equity scheme for first home buyers (FHBs) and the Bank of England’s “Funding-for-Lending” program, which subsidises lenders’ borrowings provided they pass on the loans to households and firms. According to three main housing


Links 27 September 2013

Global Macro / Markets: Yield-Oriented Investors and the Monetary Transmission Mechanism – Federal Reserve Swaps traders fret ahead of new regulations – Wall Street Journal Rising Rates Seen Squeezing Swaps Income at Biggest Banks – Bloomberg Here comes the great bond liquidity drought – Euromoney North America: Why Would Anyone Buy Credit Default Swaps on


Australian population growth moderates

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released the Australian Demographic Statistics for the March quarter of 2013. According to the ABS, Australia’s population grew by 1.8% in the year to March 2013, slightly below the rate recorded in the year to December 2012, but well above the 30-year average of


NSW drives bounce in ABS job vacancies

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released job vacancies data for the August quarter, which revealed a seasonally adjusted bounce in job vacancies, driven almost exclusively by New South Wales: According to the ABS, total job vacancies rose by a seasonally adjusted 3.1% over the quarter, with private sector vacancies


Vacant office space running “sky high”

By Leith van Onselen The dichotomy between the residential and commercial property markets could not be more stark. Whereas residential property is experiencing another bull run, with prices rising and rental vacancies remaining low (albeit a little higher than last year), commercial property vacancies are shooting-up, with vacancy rates hitting levels in excess of the


Members’ report: Will Melbourne property chase the Sydney rocket?

In last month’s members’ report on Sydney housing, we argued that Sydney’s housing market is built upon relatively sound fundamentals, including tight supply, solid rental yields, and above-average jobs growth. In this month’s report, we turn our focus to the Melbourne housing market, which is built upon far shakier foundations and remains at risk of


Cut company tax, raise GST

By Leith van Onselen David Uren has published an interesting article today in The Australian making a solid case for cutting company taxes in exchange for raising the GST. According to Uren, smaller trade exposed economies are better served by applying low taxes on company profits, since global corporations will tend to locate themselves and


Links 26 September 2013

Global Macro / Markets: Economist Wins Genius Grant For Proving That Most Traders Are Idiots – Business Insider Wall Street’s High-Frequency Trading Technology Arms Race – pcmag.com Bubbles, Regulation, and Secular Stagnation – New York Times North America: Fed’s Q2 Flow of Funds: Household Mortgage Debt down $1.3 Trillion from Peak, Record Household Net Worth


Telstra to slash front-line jobs

By Leith van Onselen Australia’s telecommunications industry, which employs nearly 200,000 Australians, is about to get a bit smaller, with Telstra this afternoon announcing that its 15,000 strong Operations division will be cut by 1,100 (~7%) by June 2014. According to Telstra’s chief operations officer, Brendon Riley, around half the cuts will come from fixed


Residex: Property prices flat in August

By Leith van Onselen Residex has released its house and unit price results for the month of August, which revealed essentially flat growth in overall home values over the month, with house values rising by 0.08% at the national level, whereas unit values fell by 0.19%. Over the quarter, house values nationally rose by only


Links 25 September 2013

Global Macro / Markets: Markets are starting to worry about the debt ceiling, in one chart – Washington Post Soros to Goldman Poised to Win on Crisis-Era Housing Bet – Bloomberg North America: Has the Fed Been Fooled by Phony Jobs Numbers? – Bloomberg Economy Can’t Be All That’s Slowing Health Costs – Bloomberg How


Perth rental vacancies surge on mining slowdown

SQM Research has today released its rental vacancies report for the month of August, which revealed minimal change in overall rental vacancies, with the national vacancy rate holding steady at 2.2%. However, they remained 0.3% higher than a year ago, suggesting the rental squeeze is dissipating. From the Media Release: On a capital city level,


Commodities and house prices

By Leith van Onselen The Reserve Bank of Australia (RBA) released its quarterly Bulletin late last week, which included a number of papers on a variety of topics. One of the papers provided a detailed examination of the Performance of Resource Exporting Economies, namely: Australia, Canada, Brazil, Chile, Russia, and South Africa, and found: The surge


Barnett is right on GST

By Leith van Onselen Last week, the Premier of Western Australia, Colin Barnett, began lobbying the Federal Government to increase the Goods and Services Tax (GST), which he argued was essential to ensure that state government revenues were sufficient to be able to afford to cover basic services. From the Brisbane Times: ”I think the


The history of Australian property values

With the commentariat locked in a debate over whether the Australian housing market is facing a bubble, brought about by near record low mortgage rates, intense investor participation, and rising prices, it is worth revisiting the work of Philip Soos, masters research student a Deakin University, who has recently updated his chart pack tracking 150


Links 24 September 2013

Global Macro / Markets: The economist who predicted the financial crisis just sounded another alarm—it would be wise to listen this time – Quartz Forward misguidance – Financial Times Simon Johnson: Too Big to Fail and the State of Finance Today – ineteconomics.org North America: Review, Reflect and Deflect – Dallas Fed Dudley: Reflections on


Australia’s mining jobless rate surges

By Leith van Onselen The Australasian Institute of Mining and Metallurgy (AusIMM) has today released research showing that unemployment amongst professionals in the Australian minerals industry (including geoscientists and engineers) has increased from less than 2% to almost 11% in just 12 months. The survey, which was conducted across the Institute’s 13 500 members, showed:


Can low income buyers build housing wealth too?

Cross-posted from The Conversation The historically low interest rates being enjoyed by Australian households are fuelling talk of a housing bubble, despite efforts by the Reserve Bank of Australia to hose down what it calls “unrealistic alarmism” around these dangers. Many of these hopeful buyers – particularly first home owners on low to moderate incomes


China Flash PMI hits six month high

The HSBC Flash PMI for September has just been released, with the index hitting a six-month high of 51.2 points, up from 50.1 points in August. A reading above 50 points indicates the sector is expanding. Moreover, the improvement was across the board: According to HSBC: “The HSBC Flash China Manufacturing PMI rose to a


Australian dollar facing Chinese headwinds

ANZ Research has released a note today arguing that the Australian dollar, which has rebounded strongly over the past few weeks, is likely to retrace as market expectations around China face a reality check: While the Fed is the focus of the moment, we shouldn’t neglect China. The bounce in China growth expectations over recent


Is hydraulic fracking for natural gas safe?

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


Feeding and fattening on big, empty homes

By Leith van Onselen The Weekend Age published an interesting article on how Australia’s ageing population is exacerbating housing shortgages, since it is increasing the number of elderly “empty nesters” living in large homes with excess bedrooms, thereby helping to deprive young, growing families of housing choice: The number of older Australians who live alone