Special Reports


Gerard Minack on why in 2015, Australia runs out of luck

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


Special Report: The Melbourne property bubble

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


MB Members’ Report: Sydney housing loses its safe haven status

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


MB Members Report: Gerard Minack on the great ASX lag

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). 


Member’s Special Report: The incredible negative gearing bubble

Late last month, the Australian Taxation Office (ATO) released its Taxation Statistics for the 2011-12 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


MB members special report: How and when will this business cycle end?

The melange that is contemporary ideology finds no better expression than in the world’s two largest national economies.  In communist China an opaque clique of Schumpeterian capitalists has declared that its economy will undergo a final transformation to free markets. Across the Pacific rim in the uber-capitalist United States, the Federal Reserve has ascended to


Members’ Report: Adelaide property

Our recent Perth housing Members’ Report argued that Perth housing was the canary in the mine given the risks building for the Western Australian economy, including anticipated declines in both commodity prices and mining investment, which are likely to lead to sharply rising unemployment and falling income growth. We then turned our focus to the


Members special: The future of Australian LNG

It’s barely an exaggeration to say that in the years since the global financial crisis, Australia’s liquefied natural gas boom has saved the nation. As other developed economies have seen their business investment chase collapsing consumer wealth and demand down the drainpipe, Australia has enjoyed a once-in-a-century investment boom. This, above all other factors, has


Brisbane property at the crossroads

Our recent Sydney housing report argued that Sydney’s housing market, despite being Australia’s most expensive, is built upon relatively sound fundamentals, including tight supply, solid rental yields, and above-average jobs growth. We then analysed the Melbourne housing market, which is built upon far shakier foundations and is arguably Australia’s major market most at risk of


Members’ Report: Is the European crisis finally over?

The European economy has recently taken an upturn and there is some evidence that the economic crisis that began post-GFC is coming to an end. The question is therefore whether the recent good news is part of a sustainable recovery or simply a seasonal or business cycle recovery that will soon fade. To better understand


Members’ report: Will Melbourne property chase the Sydney rocket?

In last month’s members’ report on Sydney housing, we argued that Sydney’s housing market is built upon relatively sound fundamentals, including tight supply, solid rental yields, and above-average jobs growth. In this month’s report, we turn our focus to the Melbourne housing market, which is built upon far shakier foundations and remains at risk of


Member’s Report: The Great Investor Overhang (May 2013)

If there is one thing that differentiates the Australian housing market from most others, it’s the propensity for Australians to leverage into buy-to-let investment properties in the face of negative income returns, in the expectation that capital appreciation will repay debt and interest. ‘Negative gearing’, as it is known in Australia, is a popular form


MB Members’ August Report: Where to for Sydney property?

Find below the August Member’s Report in which we continue our detailed look into the prospects for national city housing markets. To subscribe for this and other monthly member reports visit https://www.macrobusiness.com.au/membership/. ——————————————————————————————————- Sydney’s housing market has sprung to life recently after a prolonged period of underperformance since the second half of the 2000s, which saw


Navigating the House Price Maze

Australia’s four main housing data providers – the Australian Bureau of Statistics (ABS), Australian Property Monitors (APM), RP Data-Rismark, and Residex – have provided their capital city house price indices results for the June quarter of 2013. The ABS, APM and Residex reported that national capital city house prices rose by 2.4%, 2.8% and 2.1%


Perth Property: The Canary in the Mine

Perth’s housing market has been a star performer over the past year, experiencing strong growth in both house prices and rents. The evolution of the Perth housing market is illustrated by the next chart, which tracks detached house prices, as reported by the four main housing data providers: the Australian Bureau of Statistics (ABS); Australian


Tackle risk for super returns

Yesterday SuperRatings issued its September results for Australian superannuation funds. September continued the poor performance of this year, with year to date returns for a balanced fund of minus 4.88%. Eighty percent of investors have their super in a balanced fund so the pain is widespread. It doesn’t get much better when we look at


Australian Dollar Valuation Report

The Australian Financial Review had its annual “Power Issue” a couple of weeks ago. It’s the usual who’s who in wielding both overt and covert power. But, as we all know, power doesn’t just reside in individuals. There are external factors or influences beyond even the most powerful person’s grasp. The Arab Spring and the nascent


Master yourself, then markets

The global financial crisis signaled the end of an era, the so-called “Great Moderation” characterised by the inexorable rise in stocks and house prices amidst relatively low inflation and strong economic growth. The recession that has followed has caused financial pain for many, undermining the trust in the financial profession. Many of those disillusioned with


Australian Share Market Valuation Report

In recent months, pretty much every time there’s been a fall in the share market, a battery of experts have leapt into the press to advise ‘buy the dip’. The assumption behind this advice is the simple platitude that the share market always bounces back. Unfortunately what is never considered is the probability that the next


Australian Housing Valuation Report

Australian housing is overvalued. Nobody denies it. Debate remains, however, about how overvalued. Surveys by The Economist and Demographia claim Australian housing is the most expensive in the world. On the other hand, the Reserve Bank of Australia and local data providers like Rismark acknowledge the overvaluation but see it as less extreme and sustainable. The