UK moves to reflate housing market

I have talked previously about how the United Kingdom (UK) operates the worst kind of housing policy – one that pumps demand while placing a tight straight jacket on land/housing supply – the outcome of which is both unaffordable housing and a propensity for boom/bust property cycles (see below chart). Now the UK Government is

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Building Approvals fall 1.2% for May

The ABS has released its May data for the number and value of dwelling units approved by sector (public/private) and by state, number and value of new other residential dwelling units approved by type of building, and the number and value of non-residential building jobs approved by type of building and value ranges. TOTAL DWELLING


A busy week for data

The first week of the new financial year brings about a heavy load of data to digest, analyse and consider. With Houses and Holes still recovering, the folks at MacroBusiness will endeavour to cover this barrage of local and international data as much as we can. Here’s the tentative list for this week: From the


Weekend Musing: The problem with democracy

It’s the weekend and I’m on my third Canadian Club. So to hell with it, I’m going to step outside my usual dry realm of equities analysis and get a little philosophical. Tonight I want to have a chat about what I see as a major flaw in modern liberal democracies – namely, their tendency


Weekend Musing: Ideology revisit, TagCrowding

Another weekend of musing. Ideology revisit Back in April I wrote a piece on economic ideologies and how they can effect the decisions of policy makers and economists alike. Over the last week on MacroBusiness I have also noticed a number of threads that seemed to have swerved into discussions between holders of differing ideologies,


Are shares a safe bet in the long term?

Time heals all wounds. As in life, as in investing. Or so the average financial adviser will tell you. The standard argument goes as follows. If your investment horizon is long enough, any bad years in the share market will be ironed out by the upward trend over the long term. Stay the course, and


Weekly Market Analysis

Summary The S&P/ASX200 finished the week 83 points higher, up 1.84 per cent to close at 4,591 points on Friday. After one of the biggest one-day moves of the year, the market experienced a slight sell off on Friday to finish just below the 4600 points level. Monthly Analysis The market is almost replicating the


Australian Dollar Weekly Wrap

I’ve been absent from the currency space in a tumultuous week, as I was out of the office on Business,  where the Aussie tried to break the bottom of the range only to flip the shorts and rally aggressively back to 1.0783 as I write. What can we garner from the run up to and post


Data redux – House prices and finance

Today’s piece is inspired by the comment flow that was associated with yesterday’s piece on the RP Data – Rismark release. Specifically a little bit of apparent angst about a claim we made that, we have modelled the relationship between the quarterly moves in the ABS house price data series and the total monthly value


RPData – May analysis

As Data Sword posted yesterday the latest RPData report is out. I am running a little behind on this, but as usual I like to do a bit of analysis of the media release to find things that you won’t see reported in the MSM Capital city dwelling values declined by 0.3 per cent (seasonally


Trading Day: 1st July

The S&P/ASX 200 was slated to make further gains today, but has moved down almost 24 points or just over half of one percent just after midday, now at 4584 points. This is possibly due to the weak Chinese PMI figures (forecast at an expanding 52, came in at 50.2) and the equally important Japanese


Telstra and the NBN do a deal

A week ago Telstra (TLS) released a brief overview of the agreement reached between itself and NBN Co over the future of its network.  So a former government-owned telecommunications monopoly (turned private-sector infrastructure monolith) reached a deal on how the new, government-owned telecommunications monopoly would trash its copper network and access it’s formerly government-owned ducts


RPData Index – Charted

The monthly RP Data – Rismark House Price Index was released this morning for May with the raw data showing a fall of 0.5% after last month’s fall of 0.1% was revised to -0.3%. In seasonal adjusted terms the fall in May was 0.3% after last months 0.3% was revised to a fall of 0.4%.


Future funding housing

From the Age this morning. The Future Fund has gone into partnership with a land developer to buy and develop greenfield sites on the outskirts of the major cities. West Australian-based property developer Peet Limited yesterday announced a partnership to buy land in areas of projected population growth and develop master-planned communities. The arrangement is


Trading Day: 30th June

The S&P/ASX 200 jumped almost one percent at the open this morning, and has since advanced strongly to 4580 points, up 50 points or 1.1%. Asian markets are a bit maixed, with the Nikkei 225 steady at 9796 points, and the Hang Seng up 0.95% to 22,271 points. Other risk assets are also up, the


Credit growth remains subdued

The RBA has just released its Financial Aggregates for May. It is more of the same with credit growth remaining subdued, with housing credit growing at the slowest rate in 35 years of current data and at a three month annualised pace of just 5.2%. Below is a summary of the RBA’s release with charts of


Another China ghost city filled

Back in April I published an article, China’s largest ghost cities filled, providing an ‘eyes on the ground’ report from Wendell Cox, co-author of the Annual Demographia Housing Affordability Survey, who was touring China at the time. Wendell had provided photographic evidence showing that one of China’s famed ‘ghost cities’, Zhengzhou New District, was in


S&P strikes back

It appears yesterday’s speech by RBA Assistant Governor (Financial Markets), Guy Debelle, has done little to allay the fears of the ratings agencies about the Australian banks’ heavy reliance on offshore wholesale funding. In today’s Australian Financial Review (AFR), Standard & Poors (S&P) issued its second warning in as many months on the banks funding


Myth: Tight rental market boosts home prices

Fellow econblogger, Cameron Murray, has written a thought provoking post on his Blog about the link between tight rental vacancy rates and home prices. Cameron’s post has been re-produced below for your reading pleasure. A common housing market myth is that low vacancy rates lead to rent increases, which lead to price increases (or at the very


Skilled vacancy data weak

The latest Department of Employment and Workplace Relations skilled vacancies report provides us with yet another weak leading indicator of employment growth. According to the latest report the trend growth in skilled vacancies fell to 2% from a month earlier where it registered a fall of 1.9%. However if we take a look at the


China Auditor-General warns on local govt solvency

In what certainly will not come as a surprise to daily China watchers, the country’s top auditor has issued a new warning about the solvency of local government bodies. The head of China’s national audit office warned on Monday that the country was facing growing risks because of a sharp rise in local government debt


Trading Day: 29th June

The S&P/ASX 200 jumped over one percent at the open this morning, and advanced to 4526 points, up 52 points or 1.15%. Is this on speculation of a “positive” vote in Greece on austerity, or the Senate Committee rejection of the MRRT, or a rebound rally amidst the growing bearish conditions? Asian markets are up


Questioning rising insolvencies

Yesterday dissolve released their latest business stress test report ( available below ) and as expected, well at least by macrobusiness , the finding weren’t  good. The quarterly cost of All Bank New Asset Impairment Charges (or “Bad Debts”) for Australian Banks in the Quarter to March 2011 is $5.1 billion. That is a drop from the


Fed’s Hoenig: big banks are a threat to capitalism

The Fed’s Thomas Hoenig delivered a striking speech this week on the systemic risk posed by the “Too Big to Fail” status of US banks.  In one of the bluntest speeches from a US central banker I have seen in some time, Hoenig suggests that so-called “systemically important financial institutions” have become a threat to


Equities Spotlight: SEEK Limited (SEK)

In this week’s Equities Spotlight, we shine the torch on well-known online employment business SEEK Limited. The Business Seek (SEK) is Australia’s number one job advertising website, controlling almost 60% of the Australian and New Zeland online job-seeking market.  Founded in Melbourne in 1997, Seek now employs around 400 people and has commercial stakes in the


Forecasting error

BIS Shrapnel are never afraid of making a bullish property forecast. In July last year, near the peak of the last housing cycle, BIS chief, Frank Gelber, made the following bold prediction on the future direction of house prices in Australia [my emphasis]: Frank Gelber gave members at a Real Estate Institute of Victoria lunch


Meditations on risk and investing

My MacroBusiness colleague The Prince has written at length on this site about some of the shortcomings of the “modern portfolio theory” (MPT) that still forms the basis of  investing today. I have had this post stewing for a while, so at the risk of repeating some of the material already covered in The Prince’s


Guy Debelle on Banking

Guy Debelle , the Assistant Governor (Financial Markets) of the RBA gave a speech this morning to the  Conference on Systemic Risk, Basel III, Financial Stability and Regulation. Today I am going to talk about a few interrelated issues concerning the banking system: collateral, funding and liquidity. The financial crisis brought into sharp relief the