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Can offshore buyers save Melbourne property?

Last week’s Melbourne Housing Valuation Report provided extensive evidence of the housing construction boom currently taking place in Melbourne which, in the face of falling population growth, risks tipping the city into oversupply, putting additional downward pressure on both prices and rents. The area that is experiencing the greatest construction boom is inner-city apartments, which

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21

Just how tight is the Budget?

Some peculiar analysis has been circulating about whether the budgeted government fiscal position for 2011-12 is contractionary or expansionary.  For example, Adam Carr remarked last week- …the fiscal balance largely comes from an expected $72 billion lift, or rather surge, in revenues over fiscal 2012 and 2013. It is this jump in revenue that accounts

6

China’s property conflict

Yesterday we got a few remarks from China’s Premier Wen Jiabao.  According to Mingpao, Premier Wen said that control of food prices remains an important priority, with the usual problems that have been discussed here and there, including his concern on the supply situation, the costs of logistics (note that moving stuff within China can be

6

October 24 links: Euro delay

Europe to announce Wed. MarketWatch Banks need 108 billion euros. FT EU report blows up austerity. Alphaville Summit despair. Telegraph Leaders blame Italy. FT They must cut debt and boost growth, as well as launch an all out war for world peace! Measuring US pain. Gavyn Davies US data this week. Calculated Risk The end of

16

Sydney unoccupied

The SMH reports that the 100 or so kids that have occupied Martin Place for eight days in sympathy with the “Occupy Wall Street” protests have been forcibly removed, following the eviction of the Melbourne chapter Friday afternoon. I still don’t think this was necessary and, at least according to the SMH poll, it appears

62

Marx vs capitalism vs you

It is a measure of how un-self critical modern economics has been, that the Marxists are starting to appear to be making the most sense of the current crises. The supine acceptance that “the market is always right” — a truism only to traders and vested interests — means that there has been precious little

0

Data vault

Australian Data Motor Vehicle Sales Motor vehicle sales were a little softer in September dropping 1.5%, following their recent bounce back following the supply disruptions courtesy of the Japanese natural disasters which resulted in a gain of nearly 15% over the past three months. The drop in September was largely a result of a 5.6%

32

Reverse spruiking

  Please find below the latest email reports from the Ray White real estate agent with a particularly pessimistic outlook on the housing market (previous reports are available here, here and here). As always, these reports make interesting reading – both for their summary of domestic and global property-related news flow as well as their

13

Weekend Links

Up:  energy, Aussie, euro, CCI, metals Down: $US, Treasuries Mixed:  grains Hammered again: ore Contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year

5

Trading Day: duck and cover

The S&P/ASX 200 Index closed down 3 points to 4141 points in a strange session coming into the EU Meeting this weekend. In after hours trading, the index is up 10 points, with Euro and US markets pointing to slightly higher opens. Before I go on, something happened after “lunch” about 2pm today on the

16

RPData seeks green shoots in the desert

RPData’s latest newsletter is looking for some green shoots in housing finance but I must admit I am having a bit of difficulty seeing them myself. The charts clearly show finance for existing dwellings has flatlined. A point made here many times and ignored in the MSM in favour of boosterish comments arising from a

95

Unoccupying Melbourne

I must admit, beyond writing a story about why we might want to carry the Occupy Wall Street banner downunder a few weeks ago, I haven’t shown a lot of interest in the various “Occupy” movements in Australian cities. Not for any particular reason beyond that I assumed, rightly it seems, that any Australian movement

1

Terms of trade expectations

The ABS today released their International Trade Price Indexes for September.  These figures are not used to produce the official terms of trade measure, but they can be used to generate a very close alternative estimate. Today’s numbers show import prices flat over the Sept quarter, with export prices up 4%.  This is likely to

3

Moody’s is watching BoQ

As I mentioned last Friday Bank of Queensland’s latest results were a little worrying. It seems that Moody’s agrees and has placed the bank of its watch list: Bank of Queensland’s credit rating has been placed on review for possible downgrade after the bank reported a rise in bad debts. Moody’s yesterday said the deterioration

85

Mining jobs in context

The Pascometer offers an advertorial today for “Queensland Mining and Gas Jobs Expo” which: …rolls into Caloundra on the Sunshine Coast today with organisers expecting 2000 people to attend.  On Wednesday 10,000 people turned up for the expo’s Gold Coast gig. The patchwork economy is working. Those with longer memories will recall job applicants queueing

38

IPA carbon fallacies

The IPA, predictably, continues its attack on the pricing of carbon with pieces this week in The Australian and the Australian Financial Review. However, much of the analysis is based on falsehoods that need to be pointed out. Firstly to Tim Wilson’s piece saying that “carbon trading will fail because property rights cannot exist for

9

Chart of the Day: China GDP composition

Today’s chart comes from EconomPic created from the data and analysis within a recent Michael Pettis newsletter exploring the composition of Chinese GDP, whilst looking at if lower (or negative) interest rates cause higher savings. From 2001 to 2010, consumption has fallen from 45.3% to 33.8% whilst investment has increased from 34.6% of GDP to

27

Hope from the US?

Last night’s market action may have been worrisome for China (with metals crushed) and frustrating for Europe (going nowhere fast) but US data was excellent. The Philly Fed Index, a guide to manufacturing in the north east, and the same Philly Fed that collapsed in August, rebounded at a record pace, blowing away all market

12

Europe’s plan to agree on something in the future

Yes, I know I have been warning that the latest European plan would most likely end in something very underwhelming because of the completely incompatible positions of the French, Germans and the ECB.. and yes I know that I warned yesterday that the evidence was mounting that any deal, if it did exist, appeared to

17

Bogan marketing 101

Editorial note Yes, they’re back. The Bogamonics team. We’ve missed them. Today’s post is an excerpt from their forthcoming book, the great Australian novel, Boganomics. Indeed that’s where our high priests of the mortgage belt have been, penning their masterpiece. I’m sure it was not entirely coincidental that when Boganomics departed in June, MB suffered it’s

20

Iron ore still falling

Yesterday brought no respite for iron ore. The 12 months swaps market fell another 3.08% to a new low at $117 and Shanghai rebar was down 2.44%. Ore itself fell 1.3% to $145.80. If you combine this with the dizzying crash of copper, 6% last night to a new correction low, you have to ask

35

Is a Greek, in Germany, more productive?

Why don’t Australians fill up elevators even when there is long queue?  The elevator will be labelled for a maximum capacity of 22 people, but once eight people go in, no one else will (except me of course). I had an interesting experience my first time skiing in Austria.  I was being very Aussie and

0

Cracks appear in Hong Kong property

Yesterday, Sun Hung Kai Properties (16.HK) won the tender for the Nam Cheong station residential project for HK$11.8 billion, well below market expectations.  The price paid implies an accommodation value of HK$4,468 per sq. ft., below the market expectation of about HK$5,500 per sq. ft. The reality about this underwhelming land sale is that the

2

Fix imbalances or suffer

Yesterday, the Bank of England Governor, Mervyn King, delivered an important speech on the challenges facing the global economy (h/t Macca). The speech covers a range of inter-related topics, including: the global imbalances that facilitated the unsustainable build-up of debt across Western nations; the conundrum facing the world’s governments whereby the short-run need to stimulate

4

October 21 links: On pause

Flat: $US, Treasuries, energy, grains, Aussie, euro Down: CCI Hammered: ore, metals Contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany 2

4

Wolfson Economics Prize

Lord Wolfson of Aspley Guise, otherwise known as Simon Wolfson the chief executive of British retailer Next Group and a member of the house of Lords, has announced that he will be funding a £250,000 prize aimed at finding an exit policy for countries wishing to leave the European Monetary Union. The Wolfson Economics Prize will

64

Will you pay for The Oz?

In a stroke of irony, The Australian released the following story online this afternoon: THE Australian has announced it will launch digital subscriptions on Monday, with a three-month free trial for all readers. Publisher News Limited said the national broadsheet’s strategy was built around a digital content pass which would provide access to The Australian online and

5

Trading Day: gold crunched

The S&P/ASX 200 Index closed down 68 points or 1.66% today to 4144 points following heavy falls on commodity markets and poor leads on overnight markets. In after hours trading, the index is steady, with Euro and US markets pointing to small losses. Asian markets experienced similar moves, with Japan’s Nikkei 225 down 1% at

15

NAB survey confirms Dutch disease

The September quarter NAB Business Survey  is out and as you can see above. It shows an economy with slumping confidence and conditions, but stable pricing. NAB also makes a point of describing an economy suffering from an unprecedented division between weakness and strength: Business conditions slump and confidence falters mid-quarter, but monthly profile points to subsequent

15

RBA dials up the bank support

The RBA is pouring it on in favour of the banks just now. That makes sense given the ructions in rippling through global banking. But it’s still interesting to examine the arguments. In a speech today, Malcolm Edey, Assistant Governor (Financial System) doesn’t bother with many, he simply repeats the refrain: In Australia meanwhile the