Renovation finance slump continues

By Leith van Onselen Today’s Lending Finance data for November, released by the ABS, revealed that personal and renovation finance continues to collapse. Personal finance commitments were down 9.5% over the year, are down 26% since the March 2013 peak, and are tracking at the lowest level since late 2002: In a similar vein, renovation

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Australian dollar lower on Chinese GDP print

by Chris Becker The Chinese GDP print has seen the Australian dollar fall back to the Friday night session lows at 71.50: With Kiwi also falling: But stocks are still well bid in response to the surge on Wall Street on Friday night, although the ASX200 is now treading water. Amid all the GDP prints –


Review: Bias against vocational training ‘needs fixing’

By Leith van Onselen Former New Zealand skills minister Steven Joyce is currently reviewing the vocational education and training (VET) sector for the federal government. Joyce says it has become clear to him that there is an inherent bias against VET in Australia in favour of universities, and that he was surprised about the lack


More economists with balls needed

by Chris Becker From the bowels of Ross Gittins comes “Positions vacant: the nation needs economists (women preferred)” Never in the field of economic conflict was so much analytical effort devoted to so few… as in Reserve Bank governor Philip Lowe’s one-man crusade to save the economics profession. This latter-day Lord Kitchener wants more young


NSW/VIC investor mortgage crash deepens

By Leith van Onselen Australia’s speculator frenzy continues to unwind abruptly, according to today’s Lending Finance data for November, released by the ABS. As shown below, the annual value of investor loans in New South Wales (read Sydney) is falling fast, as is Victoria (read Melbourne). Investor loans in the other major jurisdictions are also in


Labor has little to fear from negative gearing policy

By Leith van Onselen The Australian has stepped-up its scare campaign against Labor’s negative gearing and capital gains tax (CGT) reforms, arguing that Labor risks alienating its voter base and losing crucial votes in the upcoming federal election. Here’s Adam Creighton and Michael Roddan: More than a quarter of all Australians who own an investment property


Expert: Opal Tower a “sign of industry trouble”

By Leith van Onselen Construction expert David Chandler says he was not surprised about the structural problems that have afflicted Sydney’s Opal Tower. Chandler, who is a former CEO of Fletcher Construction Group and who chaired the inquiry into the flawed $16.2 billion school halls national building project, says little seems to have been done


High-rise schools an expensive failure

By Leith van Onselen The destruction of Sydney’s residents’ living standards from endless immigration-fuelled population growth is well documented. As the city’s population has ballooned by 960,000 people over the past 13-years, we’ve seen traffic congestion worsen immensely: And housing affordability deteriorate to levels that are amongst the worst in the world: The crush-loading is


Migrant wage theft continues to run riot

By Leith van Onselen Systemic wage theft, usually involving migrants, continues to pervade across the Australian economy. Over the weekend, we got another dose, with a Melbourne company and two individuals fined $335,664 for underpaying Chinese workers at a Melbourne 7Eleven franchise and Japanese restaurant. From Human Resources Director: Xia Jing Qi Pty Ltd, which


Mortgage Stanley: Aussie house prices to fall 15-20%

By Leith van Onselen Morgan Stanley has joined the conga-line of analysts downgrading their outlook for the Australian housing market, revising its forecast peak-to-trough property decline from 10%-15% to 15%-20%. From The AFR: House price falls are steeper than thought as key indicators, ranging from rental conditions to credit supply, weaken… The research says credit


Migration Council chair pumps more skills shortage propaganda

By Leith van Onselen Once again, the chair of the Migration Council of Australia (MCA) and big business lobbyist for the Australian Industry Group (AIG), Innes Willox, has penned an article in The Australian claiming that skills shortages are widespread, thus necessitating ongoing mass immigration, while also hypocritically bemoaning high youth labour underutilisation: Just as skill


Demographia 2019 International Housing Affordability Survey

By Leith van Onselen The 15th Annual Demographia International Housing Affordability Survey has been released and, once again, it ranks Australia as having one of the most expensive housing markets out of the countries surveyed even though affordability has improved over the past year on the back of heavy house price falls. This year’s report


Australian Treasury sounds the property alarm

By Leith van Onselen After spending years telling us that Australian housing was not a bubble and Australia’s world-beating housing debt was “not a situation for concern”, Australian Treasury officials have warned the Morrison Government that Australia’s household debt will become unmanageable if unemployment rises. From The AFR: “A large increase in unemployment would quickly see


ATO: SMSF mortgages a ticking time bomb

By Leith van Onselen The Howard Government’s decision to allow self-managed super funds (SMSFs) to leverage into property and other investments was a mistake. Specifically, it allowed SMSFs to be turned into speculative vehicles rather than savings vehicles, in turn dramatically increasing the riskiness of Australia’s retirement savings and financial system, further inflating Australian house


With productivity decelerating, China’s economic miracle is over

CBA Senior Currency Strategist, Joseph Capurso, has produced a new research report arguing that “China’s economic miracle is over” owing to slowing productivity growth and demographic headwinds. This will drag China’s growth down “from around 6% currently to around 4% by 2030”: According to Capurso, despite the slower growth, China may still escape the so-called


Links 21 January 2019

  Macro & Markets The world favors immigration and working with other countries, WEF report claims – CNBC…a WEF report would… Why the Quants Aren’t Adding Up – Bloomberg China offers 6-year plan to boost US imports and erase imbalance – Nikkei Asian Review ‘Bear Market’ Is an Arbitrary Label, but Using It Can Hurt


Weekend Links 19-20 January, 2019

Short man with two dogs, Linda Marrinon, 1990, Art Gallery of NSW   Americas Trump Pulls U.S. Delegation Out of Davos Forum, Citing Shutdown – Bloomberg Shutdown clouds outlook for consumer-driven U.S. economic growth – Reuters Chinese ambassador Lu Shaye warns ‘back-stabbing’ Canada to stop rallying allies in row over detainees – SCMP Trump Vows


Macro Afternoon

Asian shares finish the week with a flourish, with green results across the board as optimism grows over a potential positive outcome to the trade talks between the US and China. USD remains firm against the Asian major pairs with both the Aussie and Kiwi retreating while gold also fell a few dollars per ounce.


Global clean energy investment falls in 2018

by Chris Becker While the headline looks bad at first glance, there’s still a lot of good news for renewable energy investors and energy consumers with the Bloomberg New Energy Finance annual report out this week. Global clean energy investment totaled $332.1 billion in 2018, down 8% on 2017; last year was the fifth in


Shorten doubles down on negative gearing reform

Great to see from Australia’s next Prime Minister: The federal government’s campaign against Labor’s proposed changes to the negative gearing tax break is aimed at distracting Australians from its own shortcomings, Opposition Leader Bill Shorten says. Mr Shorten says the government is trying to hide that the economy is not working in the interests of


Long-term migrant arrivals hit another all-time high

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released visitor arrivals and departures data for the month of November, which again posted turbo-charged net annual permanent and long-term arrivals. In the year to November 2018, there were 828,980 permanent and long-term arrivals into Australia – up 7% from November 2017 and an


Ray Dalio: capitalism isn’t working

by Chris Becker It’s always interesting to hear mega-capitalists complain about the very system that provides them opportunity to turn their talents into Scrooge McDuck size piles of cash. Furthermore, it’s usually the most successful that have the most liberal of views and Ray Dalio, head of hedge fund Bridgewater, has weighed in again. From CNBC:


Coalition doubles down on negative gearing rent lies

By Leith van Onselen Earlier this week, the Coalition announced plans to target 270,000 young renters in Australia’s 25 most marginal seats in the lead-up to the next election, believing that Labor’s plans to curb negative gearing could prove a vote winner for the federal government. In No surprise then to read that Capricornia MP,


Adelaide Uni dumbs down standards to chase foreign student dollar

By Leith van Onselen Adelaide University’s vice chancellor, Peter Rathjen, says he is aggressively targeting growth in foreign student numbers, vowing to grow international student numbers to more than 10,000 in 2019. From Adelaide Now: Under vice-chancellor Peter Rathjen, Adelaide University says it is aggressively targeting growth, mainly to be a more “global” institution. Adelaide projects