Leith van Onselen


Melbourne planning’s Irish connection

By Leith van Onselen Catherine Cashmore’s excellent article published earlier in the week in Property Observer contained some inconvenient truths about Melbourne’s planning system, which Cashmore likens to Ireland’s prior to its housing crash: Over the next 40 years, Melbourne’s population is set to expand to a projected eight million eventually putting the state in


Links 18 October 2013

Global Macro / Markets: How traders might have made money manipulating massive currency markets – Quartz North America: Here Are The 144 Republicans Who Voted To Send The U.S. Into Default – Business Insider Signs of a new credit bubble emerge in business lending – CNBC Fed’s Fisher warns of potential U.S. housing bubble, MBS


Canada’s bubbly housing market gains momentum

  By Leith van Onselen Earlier this week, joint winner of the 2013 Economics Nobel Prize, Robert Shiller, identified some parts of the US, Australia, China, Brazil, India, Norway, and Belgium as countries that could potentially be in the thoes of a housing bubble. For some strange reason – maybe and oversight – Shiller left


Getting development incentives right

By Leith van Onselen Interest.co.nz has published a thought provoking article today quoting the New Zealand Initiative’s executive director, Dr Oliver Hartwich, who argues that the key to improving housing supply and affordability is to shake-up local government financing so that they receive funds in proportion to their populations. Such reforms, Hartwich argues, would align


Property industry confidence highest in years

By Leith van Onselen ANZ Bank has today released its quarterly property industry survey, which gauges the views of around 3,000 property industry professionals. This quarter’s survey revealed bouyant expectations for house price growth, the avialability of finance, and property construction. Overall confidence amongst industry professionals is the highest in more than two years, with


The stupidity of privatising HECS debt

By Leith van Onselen Following on from my article yesterday questioning the merits of the Government’s proposal to sell-off Australia’s $23 billion of outstanding HECS debt to the private sector, Matt Cowgill has published a neat post fleshing-out some of the concerns in greater detail: …The proposal is kind of bananas. Think about it from


Reality bites for retail landlords

By Leith van Onselen It has been well documented on this site that Australia’s discretionary retailers – and department stores in particular – are doing it tough. Whereas overall retail sales have managed to at least track inflation, led by solid growth in food retailing, overall discretionary retail remains in the gutter, with department store


Are we building for investors or owner occupiers?

By Leith van Onselen Earlier this week, property market analyst, Catherine Cashmore, posted an excellent article in Property Observer arguing that the Australian housing system is predominantly building homes for investors and in the process leaving first home buyers (FHBs) in the lurch: Any hint that the cost of accommodation may be unaffordable for a


Links 17 October 2013

North America: The Beige Book – Federal Reserve Senate reaches deal, House will vote first – Politico Stop Fretting: The Debt-Ceiling Crisis Is Over! – New York Mag The Government Shutdown Has Revealed Silicon Valley’s Dysfunction Fetish – New York Mag Barack Obama vs zombies – Reuters Stay Put, Young Man – Washington Monthly Your


Why is construction productivity so lousy?

By Leith van Onselen PricewaterhouseCoopers (PwC) has released a new report arguing that low productivity in the construction industry is pushing-up costs. From the AFR: The construction sector is a big contributor to the Australian economy but is a “serial underperformer” when it comes to productivity, says PricewaterhouseCoopers in a new report… “Improved productivity would


Is Abbott about to securitise HECS debts?

By Leith van Onselen The Western Australian newspaper has reported today that the Abbott Government is considering selling-off Australia’s outstanding Higher Education Contribution Scheme (HECS) debt to investment banks, so that they can be bundled-up and sold as asset-backed security (ABS) to private investors: The university education debt of millions of Australians could be sold


Is Ponzi Joe out of step with the Coalition?

By Leith van Onselen The Assistant Federal Treasurer, Arthur Sinodinos, has today posted an article in The Australian urging a new round of reform aimed at boosting competition and improving resource allocation across the economy: The best way to stimulate global growth is determined efforts to promote freer trade linked with domestic action to ease


BoQ pleads for equalisation of bank capital rules

By Leith van Onselen Bank of Queensland (BoQ) chief, Stuart ­Grimshaw, has urged the Federal Government to boost competition in the home loan market, claiming that the bank capital rules are unfair, since they enable the Big Four banks to hold far less capital than smaller deposit-taking institutions. From the AFR: …the government’s planned inquiry


Rental vacancies dip in September

By Leith van Onselen SQM Research has today released rental vacancies data for the month of September, which registered a slight fall in the vacancy rate nationally to 2.1%, but with vacancies still 0.3% higher than the same time last year (see below table). As shown above, the outcomes across each capital city differs, with


Roy Morgan consumer confidence hits new high

By Leith van Onselen Roy Morgan Research (RMR) last night released its weekly consumer confidence index, which surged its highest level since January 2011 to be marginally higher than three weeks ago after the new Abbott Government was sworn in. Over the week ended 5-6 August, the RMR index rose by 4.4 points to 124.2,


Links 16 October 2013

Global Macro / Markets: Robert Shiller: ‘When I look around I see a lot of foolishness, and I can’t believe it’s not important economically’ – Washington Post Credit default swaps run out of road – Financial Times Bond-fund manager has had about enough of these bonds – Wall Street Journal The artificial fuel for growth


Australia’s GFC fallout merely delayed

By Leith van Onselen The AFR has produced an interesting editorial today arguing that the Global Financial Crisis (GFC) adjustment was not avoided by Australia, but merely delayed: Five years ago this week, the Rudd government launched its first round of stimulus spending designed to pre-empt a return of the Great Depression… Australia escaped Mr


An expedited FTA with China is a big risk

Cross-posted from The Conversation Forget APEC. That is so 1997. Prime Minister Abbott has recently established an ambitious – not to mention exceedingly optimistic – deadline of 12 months to conclude a Free Trade Agreement with China. If he succeeds, he will have triumphed where Mark Vaile, Simon Crean and Craig Emerson failed: to persuade


More manufacturing pain as Toyota axes jobs

By Leith van Onselen The decline of Australian manufacturing continues, with Toyota Australia today announcing that it would cut another 100 jobs from its Altona assembly line in Melbourne, citing a drop in export numbers. The latest job losses are on top of Toyota’s decision in January to axe 300 jobs at Altona, which was


Australian personal lending falls

By Leith van Onselen The Australian Bureau of Statistics has released Lending Finance data for the month of August, which registered a seasonally-adjusted fall in personal, housing and lease finance commitments, but a big rise in commercial finance commitments (see next table). In seasonally adjusted terms, the value of personal finance commitments fell by 2.6%


Australian new car sales trend lower

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released new motor vehicle sales for the month of September, which registered a 0.1% seasonally adjusted fall over the month and a 3.5% decrease over the year (see next table). As shown above, sales fell in four states and territories and rose in


Joe Hockey: Ponzi Lord

By Leith van Onselen As noted by Houses and Holes earlier today, Federal Treasurer, Joe Hockey, gave an interview on CNBC in New York in which he defended claims that Australian housing is a bubble with the below response: “A lot of commentators, particularly over here [the US], don’t understand the Australian housing market. The


Investors pile into Sydney property

By Leith van Onselen Yesterday’s housing finance data for August, released by the Australian Bureau of Statistics (ABS), threw up some interesting results for New South Wales. As we know, Sydney house prices are booming, with dwelling values increasing by nearly 10% over the past 12 months and by over 11% since the start of


Links 15 October 2013

Global Macro / Markets: Rich hedge funders to poor: We feel your pain – Yahoo World financial leaders see glimmers of hope for economic recovery beyond US debt impasse – Washington Post Warning of Global Risk, Leaders Urge U.S. to Solve Its Debt Limit Crisis – New York Times Commentary: U.S. fiscal failure warrants a


Risk aversion as Aussies worry over retirement

MLC have today released their quarterly Australian Wealth Sentiment Survey, which is based on the responses of 2,062 participants to seven questions related to: Current financial situation – asking respondents to indicate current holdings in each asset class. Investment intentions – asking the respondents whether they are likely to invest more or less. Net values


China dicing with death on water security

By Leith van Onselen The availability of clean water has long been an issue in China and a potential stumbling block to its development. Earlier this year, the issue came into stark focus following the discovery of 16,000 dead pigs Huangpu river in China, as well as 1,ooo dead ducks floating in the Nanhe river.


New home finance steady but barriers remain

By Leith van Onselen Today’s housing finance data for August, released by the Australian Bureau of Statistics (ABS), showed virtually no change in mortgage demand for new homes, with the total number of finance commitments for construction and new dwellings decreasing by a seasonally adjusted 0.1% over August, to be up by 11.5% over the year