Australian Property

By Leith van Onselen It’s been a disastrous month for Sydney’s housing market.

By Leith van Onselen Yesterday, a Senate hearing into Managing Compliance with Foreign Investment Obligations for Residential Real Estate heard that Victoria (read Melbourne) is the nation’s hotbed for illegal foreign purchases of Australian property.

By Leith van Onselen Over the past year or so, I have met a bunch of people that have moved to Geelong to escape Melbourne’s worsening congestion and deteriorating quality of life, as well as to buy an ‘affordable’ home, which has become increasingly difficult to find in Melbourne.

Via Domainfax: When it comes to access to housing in Australia, the playing field is far from even.

By Leith van Onselen It hasn’t taken long for Australia’s property locusts to swarm the new Victorian Government.

Via the AFR comes T Rowe Price’s head of Australian equities, Randal Jenneke: The fund manager’s base case view sees house prices falling by between 10 and 20 per cent, but outside factors such as the 2019 federal election could escalate the downturn.

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%).