Leith van Onselen


Links for 29 November 2012

Global Macro: SocGen’s 2013 Global Investment Outlook – Business Insider Safe or junk, bonds in bubble trouble – Reuters The Americas: California Shows Signs of Resurgence – New York Times Federal Lending Push Swells Student Debt – Wall Street Journal Fed’s Evans wants more easing, Fisher wants limits – Reuters Fed: Consumer Deleveraging Continued in


Finally some much needed auction reform

By Leith van Onselen This week’s SQM Research Newsletter contained some welcome news for those that believe Australia’s property auction system is rigged and in dire need of reform. Here’s SQM’s managing director, Louis Christopher, explaining the changes taking place: “There have been some big developments in recent days over auctions, which I think is


NZ’s economic omen for Oz

By Leith van Onselen Please find below an interesting economics research note from the Bank of New Zealand (BNZ) on the growing economic imbalances developing in the New Zealand economy, which is encapsulated by the -11% fall in exports over the past year and the 33% increase in home sales. The note provides a stark


Abbott promises low jobs growth

By Leith van Onselen Coalition leader, Tony Abbott, today made the ‘ambitious’ pledge that a Coalition government would deliver 1 million new jobs in its first five years in office and 2 million jobs should it remain in power for ten years. From the Australian: TONY Abbott has sought to counter claims he has no


Trade deficit more than doubles in the September Quarter

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released a brand new data series entitled Balance of Payments – Goods and Services, which: Provides preliminary quarterly estimates of goods and services data including preliminary quarterly estimates of Chain Volume Measures for goods debits. Preliminary seasonally adjusted quarterly balance on goods and


Foreign buyers add to Auckland housing squeeze

By Leith van Onselen Auckland is by far New Zealand’s biggest city. It’s metropolitan area is home to around 1.5 million residents, or  roughly one-third of New Zealand’s population. It also has by far the most expensive housing in the country, with its stratified median house price hitting an all-time high of $572,825 in October


Rio is the last bull standing

By Leith van Onselen Earlier this month, Rio Tinto’s Chief Economist, Vivek Tulpule, told reporters that the firm believed that China’s economic growth would rebound and stay strong until 2020: Rio Tinto expects economic growth in China to rise to at least 8 percent in 2013 and average 8-9 percent to 2015, a more bullish


Concrete use surges in WA, NT

By Leith van Onselen On Friday, the Australian Bureau of Statistics (ABS) released concrete production statistics for the month of October, which revealed a huge pick-up of concrete volumes in Western Australia and the Northern Territory – two of the prime beneficiaries of the current mining investment boom. The data is incredibly volatile and no


Auction clearance rates dip in Victoria

By Leith van Onselen The auction clearance rate in Victoria remained just above 60% over the weekend on large volumes, although there were once again a significant number of unreported results that are likely to push the clearance rate lower as late resultsare chased-up. The Real Estate Institute of Victoria (REIV) reported a provisional auction


The US gas triple threat

By Leith van Onselen The Sunday Age/SMH ran two articles picking-up on the looming threat to Australian coal and gas exports caused by the shale oil and gas boom currently gathering pace in the US. First, here’s David Pott’s take on the situation (my emphasis): …our sovereign debt is low by global standards, but it’s


Commodities daily

Courtesy of ANZ: Reports suggest Chinese buyers had defaulted on three Australian thermal coal imports and some from South Africa, but are unlikely to spark a wave of cancellations (that we saw in May/June). We remain cautious – China’s domestic stockpiles at power plants are high and many traders in China could face tight liquidity


Two speed economy continues

By Leith van Onselen Following on from Westpac’s note on state-by-state growth, published this morning by Houses & Holes, below are some charts summarising the the growth in real gross state product (GSP) as reported yesterday in the Australian Bureau of Statistics (ABS) annual state accounts. First, the below chart shows the change in real


Land values deflate across Australia

By Leith van Onselen Last month, the Australian Bureau of Statistics (ABS) released the annual national accounts, which contained land values data for each of Australia’s states and territories, as well as nationally. This data showed that Australian residential land values relative to GDP had deflated further to 1.90 times GDP in June 2012 from


Links 22 November 2012

Global Macro: The Lender of Last Resort: Lessons from the Fed’s First 100 Years – Working Papers – St. Louis Fed – stlouisfed.org Daily chart: Boom and bust – The Economist North America: Jobless Claims in U.S. Decreased Last Week to 410,000 – Bloomberg Weekly Initial Unemployment Claims decline to 410,000 – Calculated Risk Markit


How to fix housing for good

By Leith van Onselen Catherine Cashmore published an interesting article yesterday at Property Observer questioning whether house prices in Australia can forever out-pace inflation: …we’re reaching that time of year where real estate pundits will dust off the crystal ball and make some future predictions into 2013 – not that we haven’t had a fair


New housing index to be launched by SQM

By Leith van Onselen Missed this one yesterday.  SQM Research has revealed via the AFR that it will shortly release a new vendor asking price index that will track housing market sentiment by tracking how optimistic sellers are about selling prices. SQM will monitor a number of major real estate classifieds websites, and chart the


Doubts rise around uplift in housing construction

By Leith van Onselen Following on from yesterday’s post questioning whether housing construction can recover enough to fill the void left as the mining investment boom unwinds from 2013, Bank of America Merrill Lynch has written an interesting report also arguing that the recovery in building construction will be “relatively moderate” as interest rates are


Auction clearance rates bounce back in Victoria

By Leith van Onselen The auction clearance rate in Victoria rebounded over the weekend on large auction volumes, although the high number of  undisclosed results is likely to see the clearance rate downgraded over the week as late results are chased-up. The Real Estate Institute of Victoria (REIV) reported a provisional auction clearance rate of


Rental vacancies flat in October

By Leith van Onselen SQM Research has just released rental vacancy data for the month of October 2012, which revealed little change over the month: The key points from the release are: Nationally, vacancies stagnated during October, with a mere difference of 560 vacancies, coming to a total of 49,104 and a national vacancy rate


When demand ain’t what it used to be

By Leith van Onselen ‘Underlying demand’ (or ‘pent-up’ demand) is the common methodology used in calculating whether there is a housing shortage. Put simply, underlying demand estimates what the demand for newly-built housing might be given the growth in population, trends in household size, demand for second (or holiday) homes, and economic conditions (e.g. employment,


Links 15 November 2012

Global Macro: ICAP Tumbles Most in Two Years as First-Half Profit Shrinks 26% – Bloomberg Hoenig: A Better Alternative to Basel Capital Rules – The Big Picture North America: Retail Sales declined 0.3% in October – Calculated Risk Retail Sales in U.S. Decrease for First Time in Four Months – Bloomberg FRB: FOMC Minutes, October


The house and land value trap

By Leith van Onselen Last month, I wrote an article in MacroInvestor entitled Beware the house and land value trap, which examined the pitfalls of buying new house and land packages on the fringes of Australia’s capital cities. The article was particularly critical of measures adopted by Australia’s property developers aimed at reinvigorating new home


QLD home transfers & mortgages blast off

By Leith van Onselen The Queensland Department of Environment and Resource Management (DERM) has released data on housing transfers and mortgage lodgements for the month of October. According to DERM, the number of housing transfers and mortgage lodgements rose by 21.2% and 18.7% respectively in October 2012, and were up 35.9% and 23.9% respectively on