Detailed Report: The 2011 Demographia Housing Affordability Survey (By Leith van Onselen)

The 7th Annual Demographia International Housing Affordability Survey has just been released and, once again, it has delivered a stern condemnation of housing policy in Australia. This year, the Demographia survey has been expanded to 325 markets in seven countries: Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom, and the United States. The

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More Flood Outcomes

Some more flood related news, after Goldman Sach’s and ANZ‘s $20 billion estimates and Julia’s A team. ABEAR has taken a punt at the export hit THE devastation from recent floods will cost the Australian agricultural sector $500-600 million, while coal exports will take a $2-2.5 billion hit in 2010-11, according to a new report.


Weekend reading: China’s banks

China’s problem. Paul KrugmanChina’s inflation dilemma. Charlie FellChina’s SHIBOR bounces big. Zero HedgeChina NPL’s. Michael Pettis30% chance of Chinese hard landing. Ambrose Evans-PritchardGreatest bear market rally in history. Calculated Risk The efficacy of capital controls. VOX(h/tNaked Capitalism)The future of Fannie & Freddie. NYTEurope’s secret fiscal integration. BloombergInflation nutters. Samuel BrittanThe love of LPTs. Ian VerrenderMelbourne’s


Guest post: Of China and guano

Following the La Niña-related floods in Queensland earlier this month food prices have spiked, adding to an already serious inflation crisis around the world and toppling the government of Tunisia. And while protesters in Tunis were hardly thinking of Queensland bananas or sugarcane as they mobbed the streets, the changing and dramatic climatic conditions that


Links January 21: Ratcheting up

China’s loan cap. Caixin (h/t Naked Capitalism)China’s illusory decoupling. Asia TimesChina overheating. FT, Michael SainsburyOre price drivers. FTChina can beat inflation. Gavyn DaviesOre price record. BloombergOre volume record. The OzIndian exports the key to rally. ReutersChinese sabre rattling. Washington TimesMore US homes. Calculated RiskFinancialisation of cows. GMMRamp mining tax to pay for flood recovery. Ian


Reader’s Question: Another visit to CentralBankopia

We received an e-mail from David this week. I really love your blog, and “get” nearly all the concepts on there now, but the one that I’ve never been able to grasp is your fiat currency “just print money” centralbankopia… You seem to be suggesting that the Federal Reserve should just “print money” as/when required,


The Days of Easy Credit are Numbered

Back in December, I wrote the following: In the early-1990s, non-bank lenders entered the Australian mortgage market and began raising funds via securitisation on wholesale debt markets. The rise of these non-bank lenders caused an intensification of competition amongst mortgage lenders. With no formal regulator and no rules outside of regular trade practices and corporations law, they


Consumer confidence takes another hit

Given that consumer confidence was already in the doldrums on the lead up to, and just after Christmas, it is little surprise that we note that one of the largest natural disasters in Australian history has given it a good kick while it is down. The Queensland floods have knocked the stuffing out of consumer


Another round of pressure

With one of the Banking overlords about to front up to a senate committee it is about time for the media to remind us all about the “pressure” they are under to raise rates. Australian banks remain under pressure to pass on higher interest rates to customers, as intense competition for funds from cash-strapped European


Pillars of boom

Yesterday Bloomberg published an interesting article on Rio’s iron ore output: Production climbed to 50.1 million metric tons in the three months from 47.2 million tons in the same period a year earlier, according to a statement today from London-based Rio, the second-biggest exporter of the commodity. The figure beat a UBS AG estimate of


Links January 20: Ore rocket

Ore approaching record high. BloombergCommodities bust. Zero HedgeAsian inflation. ReutersChina should get guarantee to buy euro. BloombergChina and Germany. FTIreland defaults. BloombergChina and the US, mutual interests. Martin WolfHow to get tough with China. Naked CapitalismChina NOT selling Treasuries. EconompicBanks want to raise again. SMHChina’s holiday home. Bernard Salt


GS loan default estimations.. a couple of other points.

As we have been mentioning since the floods hit Australia, our expectation would be for the banks, especially the Queensland based ones, to take a big hit from bad loans. Today we note that Goldman Sachs has done some numbers. The Queensland floods crisis could put nearly $5 billion worth of mortgages and commercial loans


Links January 19: Chk Chk … Boom

Spend big on recovery. SMHNo Qld labour shortage. The AgeCommodities rocket. The OzAre banks fixed? Robert Peston(h/t nakedcapitalism)The tinkerbell market. Naked Capitalism, Zero HedgeGermany offers truth or dare to market. Calculated RiskMarket takes dare: Greece, Ireland, Portugal, Spain, Italy, BelgiumWorld bank vs China. FTChina’s Treasury holdings. Zero HedgeKashkari on US debt. BloombergCurrencies, controls and exports.


More Planning Madness

An interesting article appeared today in the Fairfax press about the extortionate cost of land on the fringe of Australia’s capital cities. The value of land sold…rose 5.2 per cent to a median lot price of $186,629 over the year to September, or 2.8 per cent in the quarter alone. “Land price appreciation is a key cause of


The bill rises, feds have no idea.

As we said when the Queensland disaster was underway. It is becoming an economic reality that the $5 billion price tag will be far too low; Today we note the ANZ is estimating a number 4 times the original estimate. The rebuild effort in the aftermath of Queensland’s floods could top $20 billion, according to


Maxed out

While retail is floundering, manufacturing is dying and new housing credit is falling we note that Australians are still maxing out their credit cards, and when they have, they are just getting a new one. Australians have racked up a record $48.8 billion in debt on credit cards while banks wring hard-pressed families with interest


S&P’s missing $400 billion

Regular readers will recall that this year’s coverage began with the unwholesome news that S&P were in the process of downgrading Australia’s BICRA score – the credit rating given to the Australian financial system. This blogger has chopped a rather important chart from the primary BICRA document (see above, full document below) in order to


Tough choice

A slew of material out yesterday and today has bearing on the medium term outlook for interest rates. First, Reuters reported uncomfortable news on inflation: A private gauge of Australian consumer prices showed annual inflation ran above target in December, with price pressures likely to grow as the Queensland floods push up food costs. The


Links January 18: Fiscal flood

Germany’s European rescue. Wolfgang MunchauWeather hitting steel. FTPox Americana. Niall FergusonAlbert Edwads gets the chills. Zero HedgeCanada tightens macroprudential. BloombergSurplus washed away. SMHInterest rates. Ian VerrenderTAFE gets Dutch Disease. The AgeCoal damage. The AgeResources wage demands. Jennifer HewittChinese port ore stocks at record highs. MinewebOre rocket. Bloomberg


Ratings agencies deliver verdict; banks bury head in sand.

Today we note the ratings agencies are delivering the hard message to the banks for the Queensland Floods. Income from mortgage-backed transactions will be pared back as repayments from flood-affected home and business borrowers stall amid a lack of insurance for inland flooding. While the cost of flood damage is still being tallied, global credit


Never Trust a Real Estate Economist

With the the 7th Annual Demograhia International Housing Affordability Survey due to be released on 24 January 2011, you can expect the banks and property spruikers to come out in force proclaiming that: Australia’s housing market is not overvalued; that there is no housing bubble; that house prices will continue to rise inexorably; and that somehow Australia


Retailers need therapy

From the SMH today: The Retail Coalition is preparing to hand in documents to the securities regulator to officially incorporate its activities, enabling it to hire staff and ramp up its calls for urgent tax reform. The documents will detail plans to establish a new independent company with a constitution, board of directors, company secretary,


La Nina as Black Swan update

For those that missed it, Yves Smith of Naked Capitalism fame quoted liberally from our very own Flashman over the weekend, firing off a frenzy of activity. Amongst that traffic was a comment from Bruce Krasting that included an excellent link comparing this super La Nina with those of the past. He concludes: You are


Links January 17: Inflation nation

China trade tensions vs consumers. Wharton (h/t nakedcapitalism)China’s gigantic white elephant. Credit WritedownsIssues 2011. Doug NolandWeek ahead for the DOW. Calculated RiskOil shocks. EconbrowserCoal shock. The OzPIMCO goes for MBS. Zero HedgeCommodities and dollar inflation. Calafia Beach PunditChina bears. TelegraphChina must buy dollars. ReutersWhither next food riots? Business InsiderThe FED on housing in 2005. Tim


Guest Post: It’s a question of fundamentals

As you can imagine we are a bit busy this weekend; so we have opened the blog to a guest post. Peter W is someone who has left many interesting and educated comments on this blog, so we contacted him to see if he wanted to post an article with a round-up of his ideas.


Bad debt season.

The flood recovery continues in Queensland, but for many the economic disaster has just begun. As we said in an earlier post So imagine this; You purchased a house in the last two years, you didn’t insure it for flooding because you were told that the Wivanhoe dam meant Brisbane would never flood. Now you


Weekend Reading: Seventies bogue

China: credit and bank requirements surge. FTKorea innovates on macroprudential. Gillian TettCommodity speculation. FTNo to position limits. Zero HedgeJim rogers goes for rice. Zero HedgeWeather worries. AR Screencast (including our own Flashman)Indian inflation on charge. BloombergGerman inflation up. BloombergUS inflation up. Calculated RiskSustainability of recovery. Tim DuyUS demand is all about exports. EconompicChina bust. Colin


Why not copy Houston: A follow-up

Tuesday’s post, Why not copy Houston, has again attracted many interesting comments and ideas. The intention of this post was to provide a case study of an alternative urban planning system – Houston – that appears to have achieved far superior outcomes to Australia’s highly prescriptive approach. In particular: high quality housing that is less than half the cost of equivalent Australian


Just so you know, you’re on the hook for this.

As we mentioned in a previous post, the Australian taxpayer is on the hook for Citi-group liabilities until 2015 Citi-group actually used the facility 1 week before it expired on the 23/03/2010 to secure $10 billion worth of 5 year notes. The Australian tax payer is on the hook for that $10 billion until 23/03/2015.


The frontline of the economy rub.

Today some Brisbane property owners woke up to this. 6 inches of horrible sticky mud absolutely everywhere. Luckily businesses on the river have insurance, which we hope will be paid out. For others it is a different story. Queensland Premier Anna Bligh and Prime Minister Julia Gillard have both implored insurance companies to be flexible