Australian Property

Yesterday in response to Gerard Minack’s latest I noted that my base case was not for recession in 2019 but steep slowing to 2% GDP growth or below in H2: The principle reason for this is still high public spending, decent net exports and population growth of 1.6%.

By Leith van Onselen Yesterday, analysis from the NSW Treasury was leaked showing that lowering immigration would significantly weaken house prices: Immigration cuts planned by the Morrison and NSW governments will weaken house prices, according to analysis by the state government and economists.

Ah yes, Domainfax, quality media: The three-bedroom house in Conroe, Texas, came with a fenced yard, gleaming hardwood floors, and an open-concept kitchen.

Via the AFR: Immigration cuts planned by the Morrison and NSW governments will weaken house prices, according to analysis by the state government and economists.

Via Gerard Minack: There are risks aplenty in Australia, centred on expensive houses, high leverage and low saving.

By Leith van Onselen As auction clearance rates continue to collapse in Sydney and Melbourne: Unsold stock levels are surging, according to new analysis by Cameron Kusher from CoreLogic: The volume of housing stock listed for sale is currently higher, for this time of year, than it has been in many years.

Via S&P: Australian prime home loan arrears fell in September, according to a recently published report from S&P Global Ratings. The Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages, declined to 1.33% in September from 1.36% in August.

From Christopher Kent, Assistant Governor RBA (Financial Markets): Introduction Good afternoon, and thank you to the Australian Securitisation Forum for their invitation.

By Leith van Onselen A coalition of housing groups – calling themselves the “Good Growth Alliance” – has joined forces to attack recent calls to slow immigration into Sydney.

By Leith van Onselen Back in September, Domain analyst Eliza Owen released research explaining the strong correlation between auction clearance rates and dwelling prices, and predicted further weakening in house prices: Figure 1 shows the rolling annual clearance rate (Australia wide) alongside annual growth in the Domain median dwelling price.

By Leith van Onselen Labor-aligned think tank, the McKell Institute, has vigorously defended Labor’s negative gearing and capital gains tax (CGT) policies, claiming reform is required now more than ever and labelling critics as “either misguided or cynical”.

Westpac shows today that there is still a lot of downside left in the house price correction: Our last Housing Pulse showed buyer sentiment continuing to stabilise but a further weakening in housing markets suggested other factors were driving things – a tightening in lending standards in particular.

CoreLogic released its auction report yesterday, which reported another pathetically weak round of auctions, with auction clearances remaining near 2011 lows. The preliminary national auction clearance rate was just 46.9% versus 45.5% last weekend (later revised down to 42.0%).

Via Scott Haslem at the AFR: The housing outlook warrants significant caution.

More good work today from Martin North to block deposit bail-ins As we await formal responses from the regulators, I discuss Bail-In with Robbie Barwick from the CEC.

Via Domain: Treasurer Tim Pallas has recommitted to first-home buyer incentives, says Melbourne’s house price decline should only last 12 months and has welcomed the prospect of negative gearing changes under a federal Labor government.

By Leith van Onselen Some readers underplay reported auction clearance rates as a meaningful indicator for house prices because they are reported on a voluntary basis and tend to exclude a large number of results.

Via Bloxo comes his housing risk case with five possible triggers for a price crash: One possible driver could be a further tightening of credit availability, possibly in response to recommendations from the banking Royal Commission, which are due to be announced in early 2019,…there is considerable uncertainty on this issue.