Unconventional Economist

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7 rate rises in the next 15 months?

Leith van Onselen BIS Shrapnel was out this week with some startling predictions for the Australian economy and housing markets. It’s worth taking a look, although let’s remember that their recent form on both the economy and housing has been questionable. For example, in July 2010 – near the peak of Australian house prices –

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RP Data daily home price indices

By Leith van Onselen Please find below the RP Data-Rismark daily house price indices for 22 March 2012: And for added context, below are the index values as at the end of February, which you can compare to the above daily movements to get the month-to-date home price movements in each capital and nationally: Finally,

2

RBA’s Debelle on bank funding

By Leith van Onselen Reserve Bank of Australia (RBA) Assistant Governor, Guy Debelle, this morning delivered a speech on bank funding. It is basically a summary of the recent RBA Bulletin article entitled Banks’ funding costs & lending rates, which was discussed on MacroBusiness last week (here). The key findings from the RBA’s analysis, discussed

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Commodity exports to the moon!

By Leith van Onselen The Bureau of Resources and Energy Economics (BREE) released its Resources and Energy Quarterly—March quarter 2012 (report below) yesterday, which provides a bullish outlook for Australian commodity exports. From the press release [my emphasis]: Australia’s resources and energy commodity export earnings are forecast to continue to grow over the medium term

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The exponential end game

By Leith van Onselen On Monday, I published a post entitled “Dangerous Exponentials”, which summarised recent research by Dr Tim Morgan, Global Head of Research for Tullett Prebon. In this research, Dr Morgan presents a series of “dangerous financial and non-financial exponentials” that are not sustainable and ultimately risk destroying the economy, environment, and overall living

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Uren turns bearish on Australian property

By Leith van Onselen I came across an interesting article yesterday by The Cupboard’s Economics Editor, David Uren, entitled: Australian housing market just a jobs crisis away from collapse. It is one of the more bearish pieces we’ve seen in the increasingly circumspect MSM recently. Let’s take a look: STOCKS of unsold apartments and houses

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Housing swallows economy

By Leith van Onselen RPData, provided and interesting tidbit of information in its 2012 Capital Markets Report (available for download here), where it noted [my emphasis]: The Australian housing sector is the country’s largest and, arguably, most important asset class. The total value of homes across the country as at December 2011 was $4.54 trillion.

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Dangerous exponentials

 “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist”. Kenneth Boulding By Leith van Onselen Earlier today, The Prince published a thought provoking article questioning the economy’s addiction to population growth. It’s an issue that I have been pondering since reading the below Strategy

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It’s hip to be bear

By Leith van Onselen For me, one of the most interesting aspects arising from following the Australian housing market over the past couple of years has been the widespread change in media and public sentiment towards the state of the market. Since writing my first ever post warning of a housing bubble in May 2010

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Real Household wealth at 2006 levels

By Leith van Onselen The Reserve Bank of Australia (RBA) yesterday released the March quarter 2012 Bulletin, which contains a paper entitled The Distribution of Household Wealth in Australia: Evidence from the 2010 HILDA Survey. According to the abstract: This article uses the Household, Income and Labour Dynamics in Australia (HILDA) Survey to analyse the

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Victorian budget takes a hit

By Leith van Onselen Recent macroeconomic data coming out of Victoria has been poor. Since house prices peaked in the June quarter of 2010, Victorian economic growth, as measured by state final demand, has severely underperformed the national average, growing by only 1.8% in real terms since June 2010 – less than population growth: It’s

19

RBA: Bank funding costs have risen

By Leith van Onselen Last month, I wrote a series of articles (here, here and here) arguing that the Australian banks’ funding costs had risen since mid-2011 and that the banks were justified in raising lending rates independent of any moves by the Reserve Bank of Australia (RBA). Yesterday, the RBA released its Bulletin for

8

Personal finance rebounds in January

By Leith van Onselen The Australian Bureau of Statistics (ABS) this morning released the Lending Finance data for January, which registered a nice bounce in the value of personal and lease financing commitments, although commercial financing commitments registered a small fall: In seasonally adjusted terms, the value of personal finance commitments rose 4.3% in January,

2

Flat car sales beat expectations

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released new motor vehicle sales data for the month of February: On a seasonally adjusted basis, new motor vehicle sales were flat in the month to be 1.7% higher over the year. The result beat analysts’ expectations, who had tipped that new car

33

Capital rules drive bank profitability

By Leith van Onselen From a reader comes the below extract from Citi arguing that the profitability of mortgages on the banks’ books has risen strongly since the introduction of Basel II in 2006. For background, Basel II is the capital adequacy regime pertaining to Australia’s banks, building societies and credit unions (collectively known as

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Mineral exploration explodes in WA

By Leith van Onselen Yesterday, the Australian Bureau of Statistics (ABS) released Mineral & Petroleum Exploration data for the December half/quarter and it’s boom boom time in the resources sector! Nationally, expenditure on minerals exploration hit an all-time high of $2,015 million in the December half, with petroleum exploration expenditure also rising to $1,677 million;

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QLD leads fall in dwelling commencements

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released dwelling unit commencements data for the December quarter, and it’s another poor result. In seasonal adjusted terms, total dwelling unit commencements fell by -6.9% in the December 2011 quarter, which follows a -6.0% fall in the September quarter. In the 12 months

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Queensland mortgage volumes remains weak

By Leith van Onselen Following on from yesterday’s State Government data showing the depressed state of Victorian housing transfers and mortgage finance commitments, below are some charts showing similar trends for Queensland taken from Department of Environment and Resource Management (DERM) data on housing transfers and mortgage lodgements. Like the Victorian Department of Sustainability and

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Home sales lowest since 1996

By Leith van Onselen From Property Observor today comes this gem from RP Data, showing that the volume of home sales in calender year 2011 was the lowest in 15 years: The number of property transactions in 2011 was the lowest number of calendar year sales since 1996. The annual volume of sales across the

24

Victorian mortgage growth still weak

By Leith van Onselen With the Australian Bureau of Statistics (ABS) scheduled to release the January Housing Finance data tomorrow, I thought it would be worthwhile to update readers on recently released Victorian Department of Sustainability & Environment (DSE) data for the month of February, which shows continued weakness in the number of housing transfers

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AFG shows steady housing market

Please find below another guest post from MacroBusiness reader, Nathan Webb, examining the latest AFG housing finance numbers. Nathan’s previous post on the AFG data can be viewed here. A few weeks back saw the release of AFG’s mortgage sales volumes.  As most expected, there was a large jump from the January and December figures

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Trade deficit stuns everybody but MB

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released trade data for the month of January, and it’s a shocker, with the trade balance moving to a deficit of $673m in January 2012, a turnaround of $1,998m on the surplus in December 2011. The worsening trade balance has been driven solely

8

Unemployment gulf continues

By Leith van Onselen Last week, Australia’s unofficial provider of labour force data, Roy Morgan Research, released its employment figures for February, whereby it estimated that 9.7% of Australians were unemployed, down 0.6% from January 2012. As explained last month, Roy Morgan Research measures employment differently from the Australian Bureau of Statistics (ABS), which is

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S&P warns on China risk to house prices

By Leith van Onselen From S&P comes the following warning on Australian house prices: Australian house prices could decline by more than 5% in 2012 if China’s economy experiences a soft landing with GDP growth at about 8%, according to Standard & Poor’s. But in the event of the less-likely scenario, under which China’s economy

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Australia’s stale houses

By Leith van Onselen From Australian Property Monitors (APM) via Property Observor comes the below table showing the average number of days taken to sell a home in each capital city.   Amazingly, in four of the six capital cities, it took on average of more than 100 days to sell a home as at