Unconventional Economist

21

CoreLogic weekly house price update: What lockdowns?

In the week ended 2 September, the CoreLogic daily dwelling values index increased another 0.33%: All major markets recorded rising values. Note, Perth’s daily index has been suspended while CoreLogic investigates anomalies: Quarterly price growth remains turbo-charged at 5.09% across the five major capitals. Sydney (6.47%) continues to lead the way, followed by Brisbane (6.21%),

10

Links 3 September 2021

Global Macro / Markets / Investing: Aluminium prices lifted to 10-year high by China concerns – Reuters OPEC Ups Oil Demand Forecast, Expected to Stick to Planned Output Increase – Barrons Wall Street Sees Nothing but Good News, Even When It’s Bad – NY Times European markets advance, looking past growth worries – CNBC Americas:

7

Construction mortgages bust, renos boom

Today’s lending indicators data for July from the ABS shows that construction mortgages have collapsed following the ending of the HomeBuilder subsidy in March: Construction mortgages have fallen 48% from February’s peak. That said, tradies should be kept busy by the home renovation boom, as evidenced by loans for alterations & additions surging to new

21

The Great Australian housing divide

CoreLogic’s August Housing Chart Pack showed that the total value of Australia’s housing stock had risen to a whopping $8.8 trillion dollars: This dwarfs other asset classes, with real estate valued at more than Australia’s total superannuation wealth ($3.1 trillion), listed stocks ($2.8 trillion) and commercial real estate ($978 billion) combined. New CoreLogic data reveals

39

Leigh Sales shreds Frydenberg on JobKeeper rorting

Leigh Sales has done a terrific job exposing Treasurer Josh Frydenberg’s hypocrisy on JobKeeper. When asked why welfare recipients are being asked to repay coronavirus support ‘overpayments’ while business are not,  Josh Frydenberg tied himself in knots: LEIGH SALES: When a welfare recipient gets their income forecast wrong, they have to repay the Government. When

10

Should Australia’s universities be prudentially regulated?

Economist and management consultant John Howard has called for Australia’s universities to be prudentially regulated in the same manner that applies to authorised deposit-taking institutions, insurance and superannuation funds in order to prevent “risky excesses”: Dr Howard said that universities’ accounts and operations should be scrutinised by a body like the Australian Prudential Regulation Authority

3

Australian mortgage demand still red hot

The Australian mortgage market rose in July despite lockdowns, according to new data released today by the Australian Bureau of Statistics (ABS). The total value of new mortgage commitments rose by a seasonally adjusted 0.2% in July 2021 to be up 68.2% year-on-year: As shown above, owner-occupiers have driven mortgage demand this cycle, whereas investor

56

NSW COVID cases climb to 20,000

NSW Health has reported another 1288 locally acquired COVID cases: NSW recorded 1,288 new locally acquired cases of COVID-19 in the 24 hours to 8pm last night. No new cases were acquired overseas in the 24 hours to 8pm last night, and eight previously reported cases have been excluded following further investigation. pic.twitter.com/zKnPGSGVs9 — NSW

11

Senate Inquiry: Raise temporary migrant wage floor

A new report from the Senate select committee on temporary migration has found that Australia’s temporary migration system is “broken” and allowing the easy exploitation of foreign workers. According to Labor’s committee chair Raff Ciccone, the closed international border in response to COVID has “exposed the dependence our economy has on temporary migration”: “There is

1

Iron ore crash pushes commodity price index lower

The national accounts for the June quarter revealed that Australia’s terms-of-trade (ToT) hit its highest ever level, surpassing the September 2011 peak: That is likely to the be as high as the ToT gets, however, with the RBA’s commodity price index for August registering a 6.0% decline in SDR terms after hitting a record high

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Links 2 September 2021

Global Macro / Markets / Investing: US is the only G7 economy to have recovered from the pandemic – Digest Time City-wide effects of new housing supply: Evidence from moving chains – Doria S&P, Nasdaq end at record highs as dovish Fed taper-talk calms investors – Reuters Gold prices rise to highest in more than

6

Lack of supply supporting property values during lockdowns

Following SQM Research’s data showing property listings hitting their lowest level on record in August, CoreLogic has released similar data showing listings running 29.4% below average: At the same time, property sales are running around 30% above average: Accordingly, CoreLogic believes the lack of stock will support property values during lockdowns: “Although there has recently

34

Virus runs riot across Western Melbourne

Analysis of today’s Victorian virus numbers by Nucleus Wealth shows that it is largely a Western Melbourne affair. Both the three-day and seven-day average case numbers across Western Melbourne are running near or above 50 cases a day:   Elsewhere across Melbourne and Victoria, the virus has been largely contained. A similar pattern has emerged

9

Frydenberg another Coalition chicken hawk

The AFR’s Michael Roddan pulled up an interesting quote from Josh Frydenberg in 2011 attacking the Labor Government’s GFC stimulus for having “fostered a culture of expectation with their lavish handouts from pink batts to school halls, from computers in schools to set-top boxes”. Fast forward a decade and Josh Frydenberg as Treasurer is vehemently

5

Universities cry poor as they print profits

Researchers from the Mitchell Institute have released interesting data on the state of Australian university finances. It turns out that university revenues are only down 6% from their pre-pandemic level in 2019. This follows an unbroken run of revenue growth that stretched all the way back to 1995: Moreover, despite universities continually crying poor, the

0

Australian GDP beats in Q2

The ABS has released the national accounts for the June quarter, with Australia’s real GDP rising 0.7% over the quarter and 9.9% year-on-year (due to the ‘base effect’). The result beat analysts expectations of 0.4% to 0.5% quarterly growth. According to Head of National Accounts at the ABS, Michael Smedes: “Domestic demand drove growth of

38

NSW records another 1116 COVID cases

NSW Health has recorded another 1116 locally acquired COVID cases: NSW recorded 1,116 new locally acquired cases of COVID-19 in the 24 hours to 8pm last night. pic.twitter.com/pweTEuCGbn — NSW Health (@NSWHealth) September 1, 2021 Four more people have died with COVID – one person in their 50s, 60s, 70s and 80s. There have been

4

Australia: land of the visa scam

Another foreign worker visa scam has been uncovered by the mainstream media. This time it involves Australia’s meat industry, which has been accused of “lies, bribery and prostitution” in the “recruitment of the Australian meat industry’s foreign workforce”: “Foreign meatworkers might have been involved in a form of visa fraud in a process overseen by

0

Business confidence collapses

Roy Morgan’s business confidence index collapsed in August after Melbourne joined Sydney in hard lockdown: Roy Morgan Business Confidence plunged 15.7pts (-13.4%) to 101.5. Despite the fall Business Confidence is 18.4pts (+18.1%) higher than a year ago in August 2020 (83.1). Business Confidence in August 2021 was 12.3pts below the long-term average of 113.8 but

46

Victoria records outbreak high 120 new COVID cases

Victoria has recorded an outbreak high 120 new locally acquired COVID cases over the past 24 hours: Reported yesterday: 120 new local cases and no cases acquired overseas. – 33,455 vaccines doses were administered – 56,501 test results were received – Sadly, 2 people with COVID-19 have died More later: https://t.co/lIUrl1hf3W#COVID19Vic #COVID19VicData [1/2] pic.twitter.com/UivzH9pHw9 —

15

Long live labour shortages

The Guardian’s Larry Elliott asks the pertinent question: “what’s so wrong with labour shortages driving up low wages?”: If labour shortages are driving up the wages of low-paid workers then what is wrong with that? There may well have been worse decades than the 2010s to be a wage earner but you would have to

15

August property listings hit record low

SQM Research’s August stock on market report reveals that for sale listings hit a fresh all-time low, plummeting by 9.6% to 215,911 from 238,834 in July 2021: This represents the lowest count of listings recorded by SQM Research since it begun its series in January 2010. The largest monthly falls in property listings in August

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Links 1 September 2021

Global Macro / Markets / Investing: Gold prices rise to highest in more than three weeks on Fed chair Powell’s dovish tone – Straits Times S&P, Nasdaq end at record highs as dovish Fed taper-talk calms investors – Reuters How foreign aid for medicine yields big economic returns – LA Times Stocks, Futures Steady on

14

CBA: GDP to rise 0.3% in Q2

By Gareth Aird, head of Australian economics at CBA Key Points We expect Q2 21 real GDP to increase by 0.3%. Household consumption, business investment and public spending will make contributions to growth. Net exports and inventories will be big drags on growth while dwelling investment should post a small fall. We expect nominal GDP