The Sydney-Melbourne rivalry has been a century in the making. In the 26 years after Australia’s Federation in 1901, the Commonwealth Government was temporarily housed in Melbourne. But after intense competition between the two cities for national-capital status, Canberra had to be built as a compromise to quell both cities. Since then, snide barbs have
Exclusively from Gerard Minack. A housing boom prevented the 2014-15 commodity bust pushing Australia into recession. Now, however, pressure on consumer incomes is increasing the risk that even a moderate downturn in housing could cause a recession in 2018. Australia coped well with the mining boom busting in 2014-15. Even so, growth has run below
It has been nearly three years since we published a members’ special report on the Perth housing market (see Perth property at the precipice, July 2014). A lot has happened since that time. Mining construction has crashed, property prices have fallen, as have rents. Domestic demand has contracted for a prolonged period, as have wages.
Fossil fuels have a limited time as viable sources of energy. And I’m not talking about saving the planet or carbon taxes, simply economics. Coal, gas, oil, all have economics based on a “scarcity curve” – the more we use them, the deeper we need to dig to find more and more expensive they become
In last year’s Christmas special report, MB forecast four shocks for the Australian economy in 2016, namely: the continued global shakeout in commodity prices; the continued unwinding of the mining investment boom; falling housing construction and prices, which we forecast would commence from mid-2016; and the closure of the Australian car manufacturing industry – which
By Leith van Onselen In recent times I have witnessed excuses about today’s record high house prices (and record low affordability) that do not pass the laugh test and warrant thorough debunking. The first is the claim that when mortgage rates halve, this means that a buyer can afford to purchase and pay-off a home
What a wonderfully hopeful species the human being is! After one day the Brexit fallout has been quite limited. The US dollar was strong but not insanely so: Yen was strong but euro only modestly weak: Commodity currencies fell but not far and the Aussie least of all: Gold jumped to new rebound highs: Oil took a
The Sydney-Melbourne rivalry has been a century in the making. In the 26 years after Australia’s Federation in 1901, the Commonwealth Government was temporarily housed in Melbourne. But after intense competition between the two cities for national-capital status, Canberra had to be built as a compromise to quell both cities. Since then, snide barbs have
China unleashed its April data avalanche over the weekend and it missed big across the board as expected. Industrial production fell back to 6% from 6.8% and 6.5% expected: Fixed asset investment eased to 10.5% from 10.7% versus 10.9% expected: Retail sales growth fell to 10.1% from 10.5% versus 10.5% expected: However, there were some better
By Leith van Onselen Below is this month’s report for MB subscribers summarising the major statistical releases pertaining to the Australian economy in March, broken-down by topic. Housing On Friday, Core Logic-RP Data released its home values results for March, which registered 0.2% growth at the 8-city level – the third consecutive monthly increase in
Negative Gearing. Who uses it and why? How much does it cost? What does it achieve? What are its risks and rewards? Should it be changed? How? What will that do to property? To the economy? Just a few of the questions answered in this special report that reveals all about Australia’s most controversial tax
The ANZ’s Richard Yetsenga has nailed his colours to the mast, from the ABC: The bank’s acting chief economist and global head of financial markets research Richard Yetsenga told a business function in Perth he believed the commodity bear market days were in their “final stages”. “I don’t think you’ll see new lows for the oil
After 24 years without an official recession, the Australian economy faces its sternest test in 2016-17. What is most apparent about the outlook for next year and beyond is the number of deleterious ‘known knowns’ and ‘known unknowns’, let alone ‘unknown unknowns’. The first of these known shocks – the unwinding of the biggest mining
Undoubtedly the biggest asset that Australians aspire to and acquire is property, either owning your home and/or investing in residential property. This has been the most risk free investment in the last 30 years as the traditional Anglo-Saxon cultural bias towards owning one’s home has been deliberately transformed into an enormous edifice of greed and
Introduction This is undoubtedly the most difficult time in a generation for an investor to make decisions about where to put his/her capital. Not only are we in the middle of a great shake up in major stock markets, and ongoing crises in European debt and Chinese equity and property, but the end of mining boom
In late April, the Australian Taxation Office (ATO) released its Taxation Statistics for the 2012-13 tax year, which once again revealed that Australia is a nation of loss-making landlords. If there is one thing that differentiates the Australian housing market from most others, it is the propensity for Australians to leverage into buy-to-let investment properties
In our last report on the Brisbane property market, released in October 2013, I argued that investment fundamentals and valuations had improved, with Brisbane housing representing a better-than-average value proposition for investors seeking exposure to Australian housing. In this report, I revisit the Brisbane housing market and find that while valuations remain in check relative
Exclusively for MB paying members from Gerard Minack of Minack Advisors. Australia enjoyed two booms over the past 20 years: the well-known once-in-a-century mining boom, as well as an unprecedented boom in banking, borrowing and buying houses. The economy is now struggling with the end of the mining boom. The bear case for Australia is
With the December house price and housing finance data in, it is an opportune time to review the state of the housing market, and to ascertain whether the current strong momentum in likely to be maintained over 2015. As has been the case in prior years, detailed reports covering the major capitals’ markets will be
Welcome to MB’s final special report for 2014. It is for paid subscribers (not trialees) so get yourself a sub today and Merry Christmas! ______________________________________________________________________ by Chris Becker Its been an astounding year trading markets in 2014 with some tremendous bubbles and eye-popping crashes. As we head into Christmas with a Russian and emerging market
By Gerard Minack, founder of Minack Advisors Australia’s once in a century commodity boom is (unsurprisingly) reversing. There is a serious risk – say, a 40% chance – that Australia has a recession in 2015. Recession would become my base case if leading indicators of employment deteriorate. Under almost any scenario the outlook is for
Welcome to MB’s penultimate special report for 2014. It is for paid subscribers (not trialees) so get yourself a sub today and Merry Christmas! ——————————————————- Six years on from the Global Financial Crisis (GFC), the global business cycle is slowly putting some distance between itself and a brush with depression. Europe has stabilised at low levels
For several years now, I have argued that Melbourne’s housing market is built upon weak fundamentals and is overvalued relative to the other major capitals. And yet, Melbourne house prices have grown strongly in recent times, driven by record demand from property investors. This report revisits the Melbourne housing market and finds that while the
For several years now, I have argued that Sydney housing offers relatively good value from an investment perspective. This was based upon the view that Sydney housing was relatively undervalued following an extended period of under-performance over the second half of the 2000s, as well as tighter supply and generally stronger fundamentals than the other
Australian equities are not expensive by global standards. However, the key investment issue is earnings, not valuation: profits increased sharply through the resource boom, and remain high in domestic sectors. If profits normalise, Australian equities will likely under-perform. The valuation of Australian equities is mid-range amongst global markets (although most markets do not appear cheap).
