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Legalising Airbnb may make housing more unaffordable

Cross-posted from The Conversation: Australia, and particularly Sydney, are gripped by a housing affordability crisis. So the NSW government’s omission of any concrete commitment to monitor the conversion of permanent rental housing to holiday accommodation, like Airbnb and Stayz, is concerning. It would seem regulators in NSW and many other states in Australia are out

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CPI Preview: Q1 2017

By Gareth Aird, senior economist at CBA: Key Points: We expect the headline CPI to rise by 0.6% in QI (2.3%pa). The underlying CPI on our forecasts will print at 0.5% (1.8%pa). Inflation outcomes in line with our forecasts are commensurate with monetary policy on hold given concerns around rapid dwelling price growth. Overview The

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‘Blowout’ in welfare spending is largely a myth

Cross-posted from The Conversation: For some time, the largest single component of federal government spending has been social security and welfare. In the last federal budget it made up an estimated 35.2% of total expenses and this was projected to rise to 37.5% by 2019-20. Given this, it’s not surprising that it’s also has been

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Do-Nothing Malcolm prepares to squib on PRRT

By David Collyer, cross-posted from Prosper Australia: The Petroleum Resource Rent Tax has been a successful revenue-sharing device since 1987, delivering well over $33 billion to Consolidated Revenue, derived entirely from the economic rents of resource extraction with no harm to producers. It has never deterred exploration or hindered output. Treasurer Scott Morrison commissioned a

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The Coalition’s housing war on youth

By Rob Burgess, cross-posted from The New Daily: It is almost unbelievable that the Coalition is still fighting internally over whether or not to allow young Australians to use superannuation savings to help fund the purchase of their first home. In political terms, it is doubly damaging. It highlights not only the weakness of the

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The great housing bubble arse-covering begins

Cross-posted from Rational Radical. Well this is all getting very exciting isn’t it?! The hills are suddenly alive with the sound of housing bubble music. Never mind that a growing mosh-pit of ‘doomsaying’ international economic peak bodies, ratings agencies, investment houses, economists, researchers, entitled Gen-Y bloggers with an axe to grind, and the odd journalist and politician

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Is Australian housing undervalued?

Cross-posted from the LF Economics Blog: The most recent bout of irrational exuberance provides an opportunity to examine the financial fundamentals underpinning the housing market. Housing prices are escalating as the mortgage debt accelerator rises; the former lagging the latter by two quarters. In contrast, rents are experiencing low growth. According to CoreLogic’s asking rental

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Much has been lost from decades of asset privatisation

Cross-posted from The Conversation: The privatisation of urban infrastructure in Australia is an ironic story. The vehicles of urban infrastructure – the utilities and the state-owned enterprises – were so central to the life of cities that they became perfect entities for private sell-off. We now live with the consequences of the sell-off. The utilities

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Half of households are in rental stress

By Martin North, cross-posted from the Digital Finance Analytics Blog: According to the latest modelling from Digital Finance Analytics, around half of all households in rental accommodation are struggling to pay their rent on time. Across all households, more than 30% are renting, and this has been rising as the costs of property escalate, mirroring

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Carrying capacity is central to the immigration debate

Cross-posted from Independent Australia: We need to recognise Australia’s very limited human carrying capacity before it’s too late, writes Sue Arnold. THE AUSTRALIAN‘S Greg Sheridan writes that, as a nation, we would be better off with 40 million people ‘rather than 28 million elderly people’, who apparently ensure a declining economy. No surprises there. The 2016 State

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The Coalition is the housing bubble’s best friend

Cross-posted from LF Economics: A fascinating aspect of the Great Australian Housing Market Bubble is that most of the price growth has occurred under LNP governments, not ALP. From 1986Q2 to 1996Q1, housing prices, adjusted for inflation and quality, increased by a paltry 9.1% over the course of the ALP government. This amounts to a

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Spare capacity to weigh-down wages, inflation

By Gareth Aird, senior economist at CBA: Key Points: Spare capacity in the Australian economy continues to weigh on inflation and wages growth. Labour market slack varies across the states reflecting divergences in state final demand. Talk of rate rises is premature because there is a significant amount of spare capacity in the economy. Overview:

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Westpac’s leading index retraces

From Westpac’s Bill Evans: The six month annualised growth rate in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell from 1.34% in January to 1.02% in February. The Leading Index continues to point to above trend growth momentum, albeit

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RBA concerned about household debt, housing risks

By Gareth Aird, senior economist at the CBA: Key Points The RBA Board Minutes confirm that policy is on hold over the near term. Strong dwelling price growth and concerns around the further build-up of debt in the household sector mean that rate cuts are off the table. Market pricing implies very little chance of

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The property crash we have to have?

By Martin North, cross-posted from the Digital Finance Analytics blog: In past years we have been highlighting the misaligned policy settings which have allowed home prices to balloon, household debt to soar, interest rates to slide and investors to gain more than a third of the market, higher than UK or USA. As banks have

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Forget value capture. Go with a broad-based land tax

Cross-posted from The Conversation: Is “value capture” a wonderful untapped opportunity to fulfil all our infrastructure dreams? Or is it just a new way to sting the taxpayer? Our new report casts a cold, hard gaze over value capture, and finds that it’s a good tax in theory, but will prove very hard to put

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Housing affordability crisis is about prices, not rents

By Lindsay David, cross-posted from the LF Economics Blog: Australia has a gigantic housing bubble, fuelled by two decades of reckless debt issuances by our deregulated, yet highly protected, banking and financial system. Indeed, the latest international data from the Bank of International Settlements demonstrates Australia has the world’s second-highly household debt to GDP ratio

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How Facebook and Google changed the online ad game

Cross-posted from The Conversation: Creativity and spectacle are becoming less important than the personal information used to target ads. The sponsored links on a Google search or in your Facebook feed are very effective, but for a completely different reason than your favourite television commercial. When you think about advertising what comes to mind is

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Hits and misses in Victoria’s housing reforms

By David Collyer, cross-posted from Prosper Australia: Victorian Premier Daniel Andrews announced a range of housing affordability measures Sunday, some of which will help. The eye-opener is the introduction of a Vacant Residential Property Tax at one per cent of the capital improved value on properties held vacant for six months or more. This mimics

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The future of suburbia

By Ross Elliott “We are living in a global suburban age… While statistics demonstrate that the amount of the world population in metropolitan areas is rapidly increasing, rarely is it understood that the bulk of this growth occurs in the suburbanized peripheries of cities. Domestically, over 69% of all U.S. residents live in suburban areas;

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Are digital innovation practices transferable?

By Rod van Onselen I was recently asked by an ex-colleague whether the digital innovation practices my teams have used could be applied in other industries. The question was aimed at the transferability of innovation practices into this person’s own business. But it got me thinking – can large corporates, public sector, and not-for-profit organisations