Leith van Onselen

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NZPC hits the mark on housing supply

The New Zealand Productivity Commission (PC) on Friday released its draft report on housing affordability. Below is a video discussing the PC’s draft findings (via Interest.co.nz). The PC report correctly identifies regulatory constraints on land/housing supply as the key impediment to affordable housing. Below are some key extracts from the report discussing the supply-side of the New Zealand housing

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12 predictions for 2012

Please find below former Reserve Bank of New Zealand advisor and multiple CEO, Terry “Macca” McFadgen’s, predictions for the year ahead. Do not take them too seriously. As noted by Macca, predictions are “foolhardy and discredited”, and this exercise is just for fun. Feel free to provide your own predictions for the year ahead in

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The demographic time bomb

Interest.co.nz’s Bernard Hickey yesterday published the below chart showing the projected decline in the number of workers per retiree in a cross-section of major economies: The chart nicely summarises the population ageing dilemma facing much of the world, whereby economies are likely to face sharply slowing economies, lower taxation receipts, higher aged care expenditures, and

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Mapping WA’s mining boom

Reader a63 posted a comment linking to the latest edition of the Department of Minerals & Petroleum’s Prospect magazine. On pages 34 to 36 you will find some incredible statistics and maps of the massive mining-related investment currently underway or planned in Western Australia. According to the magazine, “There are currently more than A$180 billion

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RP Data October housing market overview

Find below RP Data’s October housing market overview. Some key points from this update: October saw the 10th consecutive month of home price falls. That’s the same number of months that prices fell during the GFC, when prices fell just 2.7% peak-to-trough on a seasonally adjusted basis. So the current decline from peak – 4.0%

10

China’s ghost city busts

China’s most famous ghost city, Ordos in inner-Mongolia, has regularly been cited as a prime example of China’s unsustainable construction-led economy. Last year, AlJazeera posted an explosive video showcasing Ordos’ ghost apartments and frenetic pace of construction, which exemplified the “build it and they will come” approach that has underpinned the Chinese economy. Then Business

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How to kill an industry: tourism

As the mining and construction sectors continue to boom, spare a thought for Australia’s tourism sector, which is being badly affected by the high Australian dollar. Monday’s release of the overseas short-term tourist arrivals and departures figures for October showed that the ratio of tourism arrivals to departures has hit a 25-year low: With the

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We are all Keensians now

Last week, the Prince posted the below chart showing the spectacular rise and then stagnation of private credit in Australia: This rise in private credit, which is largely attributable to housing debt, has seen Australia become one of the most heavily mortgaged nations in the developed world (chart from the IMF): Commentators like Professor Steve

8

Victoria’s budget black hole will deepen

Last week, I showed how the Victorian Government is overly addicted to property taxes and discussed how next year’s State Budget is likely to get hit hard by falling stamp duty receipts, which are likely to send the budget into deficit. Included in this article was the below chart showing the Victorian Government’s heroic forecast

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Recourse mortgages don’t prevent housing busts

Yesterday, Delusional Economics linked a video from Sunday Sunrise showing SQM Research’s Louis Christopher and Sunrises David Koch (‘Koshie’) discussing the Australian housing market. While much of what both commentators said was reasonable, I found one point made by Koshie misleading: From 4.40 of the video, Koshie notes that a major difference between Australia and the

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MSM turns bearish on Melbourne housing

They are only a year late, but if we are to take the Herald Sun as a guide, the mainstream media (MSM) has turned bearish on Melbourne housing. An article entitled Sad end to a ‘Super’ day as home sales plummet encapsulates the change in sentiment: VICTORIA’S only Super Saturday of the year, with about 1000

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We should listen to David Murray (now)

In December 2010, David Murray, Chairman of the Future Fund and former CEO of the Commonwealth Bank, issued a stern warning on Australia’s high level of net foreign liabilities, which had reached nearly 60% of GDP: …the assumption that Australia could maintain a high level of foreign borrowings because the economy was underpinned by the

14

Population growth has normalised

Yesterday’s Daily Telegraph contained an interesting article on the increasing number of Australians departing Australia permanently: OVERALL migration from Australia has soared to a record high – with 88,000 leaving in the past year, almost half from NSW. The stampede abroad is a 90 per cent increase 10 years ago, figures from the Department of

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The Victorian government’s housing addiction

In last week’s article, Housing slide to hit Victorian Budget, I posted a series of charts showing how Victorian housing transaction volumes have slumped: And how the number of mortgages lodged has, for the first time in a decade, fallen behind the number of mortgages discharged: The implications of this analysis was that the falling

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QLD Budget’s housing black hole

Following last weeks article, WA Budget’s housing black hole, reader amdweb82 requested that I undertake a similar analysis of Queensland’s (QLD) budgetary situation to gauge whether it is experiencing similar pressures to WA from falling home prices and lower housing transactions. Thanks to an anonymous reader, who emailed me the data set, I now possess

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Expect the revolution to grow

Back in May, former Reserve Bank of New Zealand advisor and multiple CEO, Terry “Macca” McFadgen, wrote a guest post on MacroBusiness entitled: Will Aussie housing go bust?. He then followed up in August with Big trouble ahead. Now Terry is back with another serving of ‘Maccanomics’. In this installment, Terry provides a sobering assessment

6

Honey, I shrunk the mortgage

Some interesting analysis from Commsec (h/t auhousingcrash), confirming the thoughts of H&H last week: The average loan size plunged 1.9 per cent in September, highlighting the drop in home prices and greater influence of buying activity at the lower end of the market. The average home loan is now 0.6 per cent smaller than a

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WA Budget’s housing black hole

On Monday, I showed how the Victorian State Budget is likely to get hit hard from declining stamp duty receipts as house prices and transaction volumes fall. Thanks to reader aushousingcrash, I was able to source some interesting data on Western Australian (WA) housing transaction volumes which, when combined with falling home prices, paints a

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Xtranormal urban planning

The above video has been adapted from a satirical article written by Ross Elliott, who runs the blog The Pulse. Readers seeking further information on these matters are encouraged to read the below articles: Jumping the urban growth boundary Block sizes shrinking. Blame government policy Rethinking urban planning

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Housing slide to hit Victorian Budget

Back in April, RP Data released some fantastic research showing the increasing reliance of Australia’s state and local governments on property taxes. Two charts from this research stood out. First, the below chart shows how aggregate property taxes rose from around $19 billion in 2000-01 to nearly $32 billion in 2009-10. And the below chart

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How Phoenix housing boomed and busted

When analysing the US housing bubble, four states stand-out for the way in which home values rose into the stratosphere before crashing and burning: California, Nevada, Florida and Arizona (see below chart). Given the first three markets were covered in previous posts (see above links), I now want to analyse the Arizona housing market –

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House price falls accelerate (by Leith van Onselen)

Housing data provider, Australian Property Monitors (APM), yesterday released its September quarter house and unit price figures. It was another poor result with house price falls accelerating, declining -1.6% nationally in the September quarter compared with a -1.2% fall in the June quarter. Unit prices were more resilient, falling -0.6% in the September quarter, matching

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One glowing local government

Citizens of Australia and New Zealand, take note of the below YouTube video the next time your local government increases your council rates or unnecessarily meddles in your daily life. Sandy Springs, Georgia is a northern suburb of Atlanta that is home to around 95,000 people. In 2005, Sandy Springs took the novel step of

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Can offshore buyers save Melbourne property?

Last week’s Melbourne Housing Valuation Report provided extensive evidence of the housing construction boom currently taking place in Melbourne which, in the face of falling population growth, risks tipping the city into oversupply, putting additional downward pressure on both prices and rents. The area that is experiencing the greatest construction boom is inner-city apartments, which

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Reverse spruiking

  Please find below the latest email reports from the Ray White real estate agent with a particularly pessimistic outlook on the housing market (previous reports are available here, here and here). As always, these reports make interesting reading – both for their summary of domestic and global property-related news flow as well as their

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Fix imbalances or suffer

Yesterday, the Bank of England Governor, Mervyn King, delivered an important speech on the challenges facing the global economy (h/t Macca). The speech covers a range of inter-related topics, including: the global imbalances that facilitated the unsustainable build-up of debt across Western nations; the conundrum facing the world’s governments whereby the short-run need to stimulate

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Rents continue to flat-line

Back in August I noted how the property boosters have shifted from talking-up the prospect of rising house prices to forecasting sharply rising rents: …price stagnation… has created a headache for the property industry. With prices now expected to flat line and rental yields well below both mortgage interest rates and term deposit rates, there is reduced

16

China still building empty apartments

Yesterday, Zarathustra’s posted another interesting China report, which contained the below chart showing the continued strong growth (25% YoY) of fixed asset investment: Below find a PBS Newshour video report (h/t Hugh Pavletich) from Beijing-based economist, Yoram Bauman, who explores the possibility of a Beijing housing bubble. In the video, Bauman takes viewers on a

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More realtor gloom

Over the past few months, I have published email reports from a Ray White real estate agent with a particularly pessimistic outlook on the housing market (here and here). Below are the latest Ray White reports which, as always, make interesting reading. The first email report is from Thursday 22 September 2011. Note the reference

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RBNZ warns on banks and China

A few weeks ago, I posted an article on the Reserve Bank of New Zealand’s (RBNZ) quarterly statement on monetary policy, which contained a blunt warning on Australian bank funding costs. Yesterday, the RBNZ Governor, Alan Bollard, delivered an interview on Radio New Zealand cautioning that the impending European debt crisis could adversely affect Australian