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Melbourne lot prices hyper-inflate as population ponzi overruns supply

By Leith van Onselen Last month, The AFR reported that first-home buyers (FHBs) are desperately fighting for land in Melbourne as the city’s population soars: First-home buyers face fierce competition in Victoria’s fast-rising market, with only a quarter of the 84 lots in Stockland’s latest land release going to first-time buyers. Shaneel Veerabathula was one

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Australia has world’s lowest skills shortages, Malcolm

By Leith van Onselen The argument that Australia needs to maintain a turbo-charged skilled migrants intake (both permanent and temporary) to alleviate skills shortages was recently shot to pieces by the latest Department of Employment skills shortages report, which showed that Australian skills shortages “continue to be limited in 2016-17”, and that there are a

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RBA: Bitcoin/crypto “speculative mania”

Phil Lowe just now: Introduction Good morning. Welcome to High Security Printing Asia 2017 and, for those who have travelled from overseas, welcome to Melbourne, Australia. I take this opportunity to also acknowledge the traditional custodians of the land on which we are gathered, the people of the Kulin nation, and, on behalf of everyone here, pay

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Bitcoin’s heart of darkness exposed

Some months ago, FTAlphaville’s Izzy Kaminska wrote the following: Once upon a time, eurodollars were dollar-like liabilities issued by non-US entities outside of the reach of regulations that usually govern dollar-issuing entities. No minimum reserve requirements, no access to lender of last resort and no registration applied. Most of the time the assets which underpinned

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Morgan Stanley top trade for 2018: Sell Australian dollar

From Morgan Stanley today: We see the RBA firmly on hold in 2018 as the headwinds from a consumer crunch and evolution of a housing slowdown prevent Australia from joining the global tightening bias to monetary policy. The lack of carry for the Australian dollar makes rates differentials and rate expectations much more important in driving near term

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More evidence record dwelling construction hasn’t outrun population ponzi

By Leith van Onselen Yesterday’s September quarter property data from the ABS includes a series showing the total number of dwellings in each state. Although this series only dates back to September 2011, it is arguably the best data to use when assessing actual dwelling supply, since unlike the ABS’ various quarterly housing construction data

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Weak rental market confirms Sydney’s housing downturn

By Leith van Onselen SQM Research has released its rental vacancy series for November, which revealed a 0.1% rise in the national vacancy rate over the month but a 0.3% decline over the year: Over the year, decreases in vacancies were recorded in Melbourne (-0.2%), Brisbane (-0.2%), Perth (-0.7%), Adelaide (-0.4%), Hobart (-0.3%), Darwin (-0.7%),

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Bad Santa dead on arrival

He’s dead on arrival: Retailer euphoria over Amazon’s less than spectacular Australian launch is fading fast as trading conditions deteriorate in the lead-up to Christmas. As foot traffic in shopping centres declines and consumers cut back on discretionary purchases, retailers have been forced to pull forward discounting to compete against Amazon and lure cash-strapped shoppers. According to a Citigroup report, sales conditions

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Ponzi Pallas’ West Gate Tunnel to cost $1 billion more

By Leith van Onselen I have argued repeatedly that one of the key reasons why Australia’s high population growth (immigration) is lowering the living standards of existing residents is because of the strain that it places on infrastructure, which inevitably leads to more congestion on roads, public transport, as well as more expensive housing. Basic

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ACCC: Gas cartel still gougin’ (and it’ll get worse)

Via the ACCC today: This is the second interim report of the Australian Competition and Consumer Commission’s (ACCC) inquiry (‘the Inquiry’) into gas supply arrangements in Australia. The ACCC is focussing on the operation of the East Coast Gas Market, where there are continuing immediate and longer-term concerns. In the September 2017 report, the ACCC

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Links 13 December 2017

Global Macro / Markets / Investing: With markets going crypto-crazy, SEC chairman weighs in – Tech Crunch Who’s Afraid of Bitcoin? The Futures Traders Going Short – WSJ ETFs shattered their growth records in 2017 – Apple News Bitcoin Futures Set Scene for More Gambling – NY Times Will Robots Take Our Children’s Jobs? –

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Macro Afternoon

by Chris Becker A lack of trading volume as risk markets hesitate before the dual ECB/Fed meeting this week saw most Asian stock markets retreat slightly today, with currency markets also relatively stable. Oil prices gained a little, particularly Brent crude, but overall a calm before the storm. In mainland China the Shanghai Composite has given back

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#SardineSydney’s trains hit breaking point

By Leith van Onselen Another week, another #SardineSydney story in the mainstream media on how the city’s population is swelling way above the capacity of its infrastructure. The latest example relates to Sydney’s long suffering trains, where skyrocketing passenger numbers have again caused chronic crush-loading chaos. From The ABC [my emphasis]: Sydney Trains has apologised

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Barclays: Australian dollar worst of the G10 ahead

Via Barclays: We see AUD under-performance against G10 currencies. Australia’s growth and inflation are likely to remain subdued. Given its late-cycle position, secular adjustments in the commodity sector and downside risks to construction activity and investment. The AUD remains overvalued and its carry advantage over the USD is likely to continue to narrow, with the

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Amid flammable high-rise, building operators turn off fire alarms

By Leith van Onselen In the wake of June’s Grenfell tower disaster in London, which claimed the lives of around 80 people, a special Victorian Taskforce interim report last week identified 1,400 buildings with flammable cladding, including eight hospitals. But rather than the Grenfell tower disaster prompting caution and vigilance, some Melbourne building operators have

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There’s merit in giving states greater taxing powers

By Leith van Onselen The Institute of Public Affairs (IPA) has proposed adopting a system of “competitive federalism”, whereby the states would be responsible for setting their own GST rate and retaining the revenue. IPA executive director John Roskam suggests that the states and territories could also be allowed to impose their own income taxes.

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ASX fails to launch again

In what is becoming a regular feature of the local stock market, strong overnight leads from Europe and the US opened the bourse up but it faded through the morning: Big Iron is up on China’s rapidly easing credit growth. Go figure: Pensioner killing roars on: Big Gold is sinking at last: Big Sleazy is

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Specufestors continue to pull back from Sydney’s housing bubble

By Leith van Onselen Australia’s speculator frenzy has continued to moderate, according to today’s Lending Finance data for October, released by the ABS. As shown below, the annual value of investor loans in New South Wales (read Sydney) continues to fall, whereas Victoria (read Melbourne) – the second hottest market – continues to rise slowly. By

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ABS: Sydney drove property prices down in September quarter

By Leith van Onselen The ABS has today released its property price index – incorporating both detached houses and units – which registered a 0.2% decline in home values nationally over the September quarter but an 8.3% gain over the year, a slowing from the 10.2% annual growth initially reported in the year to June:

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NAB Business Survey crashes back to earth

The dream is over for the NAB survey: Last month’s surprise spike in business conditions was more than unwound in November, although that was partly expected. Despite the drop, business conditions remain well above the long-run average and are at solid levels across most of the economy. Forward orders were stronger as well. The construction

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Treasury sets up Black Hole Malcolm’s final humiliation

Via the AFR today: Malcolm Turnbull says he has delivered on the promise he made when he deposed Tony Abbott that he would restore confidence, create jobs and boost economic growth. And he has reassured disillusioned voters that while some of the “very big distractions” of this year were not of his government’s making, they