Leith van Onselen


APRA: We are monitoring high LVR lending

By Leith van Onselen Following news yesterday that high loan-to-value ratio (LVR) mortgage lending is on the rise, chairman of the Australian Prudential Regulatory Authority (APRA), John Laker, has declared the regulator is monitoring the situation closely, and has vowed to take action if necessary against individual lenders. From the AFR: “One area of higher


HIA sees brighter days ahead

By Leith van Onselen The Housing Industry Association (HIA) has today released its Spring 2013 edition of its National Outlook, which forecasts a moderate pick-up in dwelling construction, but a big recovery in renovation activity. It also argues that a sustainable pick-up in dwelling construction is unlikely unless structural supply-side barriers are tackled: “The improving


Australian new car sales fall again

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released new motor vehicle sales for the month of October, which registered a 0.7% seasonally adjusted fall over the month and a 3.1% decrease over the year (see next table). Sales fell in five states and territories and rose in three. As shown


Rethinking urban growth boundaries

By Leith van Onselen This blog has dedicated significant effort questioning the axioms underpinning Australia’s urban planning system. This system has grown increasingly restrictive as urban growth boundaries (UGBs), minimum targets for ‘brownfield’ development, up-front infrastructure charges, amongst other measures, have been implemented across jurisdictions since the late 1990s/early 2000s. These urban consolidation planning tools


NZ house prices hit new record as LVR caps bite

By Leith van Onselen The Real Estate Institute of New Zealand (REINZ) has released its October house price results, which registered an increase in median values nationally, with price increases also recorded across the major markets. In the month of October, the national stratified median price rose by 1.6% to just over $423,000. Prices rose


SQM launches new rental yield index

From SQM Research’s weekly newsletter comes news that it has launched a new index measuring implied gross rental yields. According to Louis Christoper: This index is a measurement of gross rental yields. That is – rents before costs such as agent fees, council fees, maintenance, taxes etc divided into the median sale price for the


Links 13 November 2013

Global Macro / Markets: Andrew Huszar: Confessions of a Quantitative Easer – Wall Street Journal Gold Is No Safe Haven, No New Investment Class, No Substitute For Paper Money – Forbes The Uncertain Future of Central Bank Supremacy by Mohamed A. El-Erian – Project Syndicate Are We in a Bubble? – Crossing Wall Street Taper


Roy Morgan consumer confidence slides again

By Leith van Onselen Roy Morgan Research (RMR) has released its weekly consumer confidence index, which retraced for a fourth straight week after recently hitting two-and-a-half year highs. Over the week ended 9-10 of November, the RMR index fell by 0.5 points to 120.0, with a serious decline in confidence in the longer-term more than


Janet Yellen’s Mission Impossible

Cross-posted from Peter Schiff at Euro Pacific Capital Most market watchers expect that Janet Yellen will grapple with two major tasks once she takes the helm at the Federal Reserve in 2014: deciding on the appropriate timing and intensity of the Fed’s quantitative easing taper strategy, and unwinding the Fed’s enormous $4 trillion balance sheet


Business lending lifts, personal lending falls

By Leith van Onselen The Australian Bureau of Statistics has released Lending Finance data for the month of September, which registered a seasonally-adjusted fall in personal finance commitments, but solid rises in commercial, lease and housing finance commitments (see next table). In seasonally adjusted terms, the value of personal finance commitments fell by 0.9% in


How to fix Australia’s busted retirement system

By Leith van Onselen Business Spectator’s Rob Burgess has an interesting article today in Business Spectator, arguing for reforms to Australia’s retirement system in a bid to make it more sustainable: The question for the 44th parliament is: do either Tony Abbott or Bill Shorten have the intelligence, the grit, the bloody-mindedness to start selling


Business leaders: Negative gearing’s gotta go

By Leith van Onselen Above is an interesting short discussion on negative gearing, aired last night on the ABC’s Q&A program. The panelists, which included a range of prominent business leaders, were asked to respond to the below question by Western Australian single mother, Leanne Murphy: I’m a single parent struggling to make ends meet


One-eyed Newman blames Labor for economy’s ills

By Leith van Onselen Last night, the head of the Prime Minister’s Economic Advisory Council, Maurice Newman, delivered a speech to the Committee for Economic Development of Australia (CEDA) urging the Government to embrace economic and fiscal reform, whilst blaming the former Labor Government for the economy’s and Budget’s woes. There was some good aspects


Australia can learn from Germany’s rental system

By Catherine Cashmore, a market analyst and journalist with extensive experience in all aspects relating to property acquisition. Follow Catherine on Twitter or via here Blog. Land.  Since history began, it has remained an integral part of the most valuable asset man desired, fought over, possessed and in many cases died for.   Indeed, property rights are


Sydney to undergo massive apartment boom

By Leith van Onselen BIS Shrapnel have released bullish forecasts for Sydney apartment construction, which it claims will be the biggest on record driven by: a decade of undersupply; strong population growth; strong capital growth; and growing investor interest both domestically and from abroad. From the AFR: Kim Hawtrey, associate director at forecaster BIS Shrapnel,


Links 12 November 2013

Global Macro / Markets: A new breed of hedge fund hunts returns without betting on gloom – Wall Street Journal A Few Good Reasons to Hoard Some Cash Now – Wall Street Journal Steel wheels slowing for iron ore producers – Business Spectator North America: Fed Really, Really Wants to End Too Big to Fail


More petrol relief ahead

From CommSec: According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 3.7 cents per litre to a five-month low of 146.2 cents a litre in the week to November 10… And while that may have been partially due to the vagaries of the discounting cycle, the recent


First home buyer retreat turns to rout

By Leith van Onselen Today’s strong housing finance data, summarised earlier, reported a further weakening of first home buyer (FHB) demand, suggesting this housing cycle continues to be driven by investors and upgraders (see next chart). As noted in my earlier post, FHB commitments nationally slumped by 9% (non-seasonally adjusted) in September and were down


Australian housing finance rockets

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 4.4% increase in the number of owner-occupied finance commitments over the month: The number of owner-occupied housing finance commitments excluding refinancings registered a seasonally-adjusted 5.0% increase over the month to


Auction clearances firm on strong volumes

By Leith van Onselen Reported auction clearance rates in Australia’s two biggest markets strengthened over the weekend. In Australia’s biggest auction market – Melbourne – the preliminary clearance rate was 72% on 925 auctions reported to the REIV, with 141 auctions listed as “no result”, which could result in some small downward revision once late


More generational war from boomer interests

By Leith van Onselen Daryl Dixon, executive chairman of Dixon Advisory and author of Securing Your Superannuation Future, published a curious article in The Australian over the weekend lamenting the “unfairness” of Australia’s superannuation system under the former Labor Government, which purportedly unfairly penalised higher income earners: THE previous government’s superannuation policy unfortunately was driven


Coalition abandons high speed pie-in-the-sky

By Leith van Onselen While we chastised the Federal Government’s decision to sack one-quarter of scientists, researchers and workers at the CSIRO, it has made a wise decision in axing the High Speed Rail Advisory Group: the body tasked with overseeing the eventual building of a high speed rail line connecting Melbourne, Canberra, Sydney and


How planning exacerbated Ireland’s housing bust

By Leith van Onselen In 2005, the UK’s Policy Exchange released a fascinating research paper describing (amongst other things) Ireland’s dysfunctional urban planning system, whereby the Government granted planning permits too late in response to rising demand, resulting in the building of large numbers of standardised, small, poor quality homes in satellite locations far away


Links 11 November 2013

Global Macro / Markets: Chilling Signs of a Market Top – The Reformed Broker Bitcoin at Record, Senate Seeks to Discuss Virtual Money – Bloomberg Be Prepared For Stocks To Crash 40%-55% – Business Insider Speech–Bernanke, The Crisis as a Classic Financial Panic–November 8, 2013 – Federal Reserve Pimco Said to Wager $10 Billion in


Chris Joye: Housing, banks significantly overvalued

Chris Joye has this afternoon continued his admirable attack on the complacency surrounding Australia’s too-big-too-fail banks and the housing market, which are both approaching dangerous levels of valuation. From the AFR: The common rejoinder one hears from housing risk “denialistas” is that this is all over-hyped, that home values are just recovering past losses. …But


Bill Evans pins economy’s hopes on housing

Below are Westpac chief economist, Bill Evans’, views on today’s RBA Statement on Monetary Policy (SoMP), which highlights growing concern about business investment and rising unemployment, ongoing fiscal drag, and minimal concern about a housing bubble. Overall, Evans views this as a dovish statement by the RBA that is likely to see interest rates head