Unconventional Economist


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


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


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,


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


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


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;


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


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


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


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


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


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


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


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


Employment growth misses expectations

By Leith van Onselen As Houses & Holes reported earlier, the Australian Bureau of Statistics (ABS)  released the labour force data for February this morning. In seasonally adjusted terms, total employment decreased 15,400 (0.1%) to 11,444,000, with all of the losses relating to part-time employment (see below chart). The result disappointed economists, who had expected the


Australian vs Canadian property

By Leith van Onselen Following on from Monday’s post, Canada’s bubble goes mainstream, Canada’s leading current affairs magazine, Macleans.ca, has published its March housing bubble report (front cover above), entitled Time to panic about the housing market: why is everyone ignoring the unfolding disaster? Let’s take a look. Back in the heady days of 2005, America looked like


Can China avoid the middle-income trap?

  The World Bank has just released its detailed report (below), China 2030: Building a Modern, Harmonious, and Creative High-Income Society, which seeks to answer the questions: Can China’s growth rate still be among the highest in the world even if it slows from its current pace? And can it maintain this rapid growth with


Canada’s bubble goes mainstream

By Leith van Onselen Friday’s article, Canadian Bubble Trouble, noted how the mainstream media (MSM) appeared to be turning from cheerleaders of the rapid rise in Canadian house prices to warning of a possible bubble and/or projecting falling housing prices. Over the past few days, the Canadian MSM appears to be shifting into overdrive, headlined


Canadian bubble trouble

By Leith van Onselen In the years following the global financial crisis (GFC), the Canadian and Australian housing markets were among the best performing in the English-speaking world. While housing markets in other English-speaking nations- most notably the United States, Ireland, the United Kingdom, and New Zealand – remained in a funk, Canada’s and Australia’s


Two speed wages

The Australian Bureau of Statistics (ABS) has just released the Average Weekly Earnings (AWE) data for the November quarter.A breakdown of the key changes is below: According to the ABS, on a seasonally adjusted basis, national total AWE increased by 0.8% in the November quarter, to be 3.7% higher year-on-year. Full-time total earnings increased by


Wages growth beats expectations

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released the labour price index for the December quarter. According to the ABS, in trend terms total wages (excluding bonuses) increased by 0.9% over the quarter, with private sector wages rising by 0.9% and public sector wages increasing by 0.7%. Over the year,


Captain Glenn on bank funding costs

By Leith van Onselen Following on from yesterday’s post, The banks were right to lift rates, RBA Governor, Glenn Stevens, yesterday provided confirmation that Australian banks’ funding costs have increased in recent times in a Q&A session at ASIC. In the video, Stevens notes that funding costs did not fall in line with the 50


The working man’s paradise

By Leith van Onselen On Friday, Houses and Holes wrote an interesting article on how the Australian economy appears to have informally adopted aspects of the German ‘kurzarbeit’ system of employment rather than the ‘slash-and-burn’ approach of US laissez faire capitalism: The basic difference is that Germany has a formal system of automatic stabilisers called


Two speed jobs (continued)

Following on from today’s earlier post on Australia’s Two speed jobs market, reader, Nick, alerted me to the ABS’ breakdown of aggregate hours worked by state, which supports the theme that Australia’s labour market is running at two speeds. Unlike my earlier post, which compared the growth in total employment, and showed Western Australia, Queensland


The jury is still out on unemployment

Yesterday’s upbeat employment data left many readers questioning the veracity of the alternative Roy Morgan Research employment survey, which registered a very large jump in unemployment in January (see here and here). While it is true that the results for January were contradictory, I believe it is too early to discount the Roy Morgan numbers,


Under the employment hood

As Houses & Holes reported earlier, the Australian Bureau of Statistics (ABS) this morning released the labour force data for the month of January and it was very good. In seasonally adjusted terms, total employment increased 46,300 (0.4%) to 11,463,000. Full-time employment increased 12,300 persons to 8,063,100 and part-time employment increased 34,000 persons to 3,400,800.


Charting China’s housing bust

Gavin Putland at the Land Values Research Group (LVRG) on Tuesday posted some interesting analysis on the China housing market gleaned from a chapter of the Reserve Banks of Australia’s (RBA) most recent Statement of Monetary Policy (chapter extract below). According to Putland, China looks to be in the throes of a property crash, based