Australian Property

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.

From S&P: – Tightened access to credit will affect refinancing conditions, but not for all borrowers.

By Leith van Onselen Just when I thought he’d hit peak stupid in the negative gearing debate, Terry McCrann has launched another embarrassing attack on Labor’s policy.

Via Chanticleer today: Kenneth Hayne looks like reshaping the governance of Australia’s leading public companies judging from the line of questioning directed at Commonwealth Bank of Australia chairman Catherine Livingstone and chief executive Matt Comyn.

Via Martin North today: We have revised our scenarios based on the latest data from our household surveys, and other available information.

By Leith van Onselen Late last month, the Australian Bureau of Statistics (ABS) released its 2017-18 Australian System of National Accounts (ASNA) release, which provided a detailed presentation of annual national accounts data.

Somebody just sent me this piece from Crikey: In recent months we’ve seen a doom ‘n’ gloom bidding war on property prices by foreign bank analysts and the media.

Via Fitch:  Seasonal Decrease in Arrears: The 30+ days’ arrears fell by 4bp qoq to 1.04% during 3Q18.

By Leith van Onselen Who would have thought: Australians don’t like being forced to cram in high-rise apartments and they are not as happy as those living in detached houses.

Via The Urban Developer: In residential property, the law of unintended consequences is hurting a significant number of property developers, driving some businesses to a grinding halt and others to the brink of failure.