By Leith van Onselen BIS Oxford Economics expects residential construction activity to decline by 1% in 2018-19, followed by a 14% decline in 2019-20. Construction activity is tipped to fall by 19% in New South Wales over the next two years and by 17% in Victoria. From The AFR: According to a report from BIS
By Leith van Onselen Earlier this week, SQM Research released its December rental vacancy and asking rent series, which showed Sydney’s rental vacancy rate had rocketed to a series high 3.6%, with nearly 8,000 more rental properties on offer (25,177) than at the same time in 2017 (17,404): At the same time, Sydney asking rents
by Chris Becker Some strikingly weird moves in the Australian dollar late in the overnight session with a big spike through the 72 handle vs USD – over 50 pips or half a cent – before a pullback in the early hours this morning before the Sydney open. What’s that all about? One can usually
By Leith van Onselen The handwringing and panic about the build quality of Australia’s high-rise buildings continues with the men behind the company BlockAid claiming that building faults are widespread and at risk of cracking or collapsing in a scenario manner to Sydney’s 34-storey Opal Tower. From The Newcastle Herald: Craig Thorley and Chris Rafferty believe
by Chris Becker Spot iron ore prices fell slightly yesterday while the short and medium term futures edged higher alongside rebar and coking prices: Meanwhile Rio Tinto is out with a production update. Via AAP: Mining giant Rio Tinto shipped 338.2 million tonnes of iron ore from its Pilbara operations in 2018, in line with
By Chris Becker European stocks were subdued overnight in immediate response to the late session slowdown here in Asia, while US markets got a bit more confidence towards the end of the session with speculation Trump is contemplating auto tariffs. Pound Sterling jumped as the UK government announced the next vote on the Brexit deal
By Leith van Onselen Slowly but surely, economists are falling into line with MB that the next move in official interest rates will be down, most likely this year. From The AFR: Capital Economics has become the fourth forecaster to call for interest rate cuts by the Reserve Bank of Australia this year, joining Market
Cross-posted from Prosper Australia: Real estate cycle expert Bryan Kavanagh says turnover and price declines in Sydney and Melbourne during 2018 indicate an economic recession in the 2019-20 financial year. The 2018 “Kavanagh-Putland Index”, released today, shows the total value of Australian real estate sales to GDP. Mr Kavanagh said the $50 billion pumped into
Yesterday afternoon I gave an interview on Radio 2GB’s Drive program talking compulsory superannuation. The interview starts from around the 44 minute mark and runs for around 12 minutes. In particular, I rip into Labor’s, the union’s, and Paul Keating’s call to raise the rate of compulsory superannuation to 12% or 15%, arguing that it
By Leith van Onselen Global ratings agency Fitch yesterday released a report on the Australian housing market predicting a further 5% fall in 2019 and a peak-to-trough decline of 12%: According to Fitch: “We expect a national peak-to-trough home price drop of 12 per cent in Australia with Sydney and Melbourne posting larger declines in
By Leith van Onselen In the week ended 17 January 2019, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, tanked another 0.35%: Values fell across all major markets: The quarterly decline has steepened to 3.13%, with Sydney, Melbourne and Perth suffering heavy losses: Over the past 12 months, home
This week’s LIVE webinar – we explore the often overlooked world of BONDS. Join MB Funds’s Head of Investments Damien Klassen and Tim Fuller as we look at: – What are bonds and the different types available – How they should be classified and how to use them effectively – How bonds fit into a
Global Macro / Markets / Investing: It’s Official: Wall Street Topped $100 Billion in Profit – Bloomberg The Marijuana Billionaire Who Doesn’t Smoke Weed – Fortune BlackRock profit misses as investors opt out of expensive funds – Reuters Why do we bother with stock market forecasts? – Irish Times Cracks are opening in the global
The rally in Asian shares slowed this afternoon as comments from the Chinese commerce industry on the global slowdown took risk well off the table. The Australian dollar cracked to a new daily low while Yen rallied on the risk off mood, affecting domestic Japanese shares. The Shanghai Composite is down over 0.4% going into the close,
From George Tharenou at UBS: …a broadening range of weaker data raises the risk of RBA rate cut. The continued fall in home loans suggests that credit tightening is still playing out, ahead of the Royal Commission final report (due Feb 1) & the next three game changers of Debt-To-Income limits, & potentially negative gearing
by Chris Becker The US Federal Reserve as an interesting report out (unlike the US government, Trump can’t shutdown the Fed! on the impact of student debt on new homeowner rates in the US. Salient because the Coalition wants the education cake and to eat it too. Last year the Senate passed the HECS/HELP adjustments
By Leith van Onselen Today’s housing finance data for November posted a 0.4% fall in the number of new home finance commitments (both construction and new), with commitments down by 12.3% over the year: The annual number of new home commitments is also falling fast: Looking at the state-by-state breakdown, which is presented below on
by Chris Becker Last night the US Dollar index (DXY) was largely unchanged mainly due to the lack of any catalysts because of Trump’s shutdown. The much watched December US retail sales were postponed but both Aussie and Kiwi lost against King Dollar, down nearly 0.4% or so each. Midday in the Asian session, the
By Leith van Onselen Today’s housing finance data for November, released by the Australian Bureau of Statistics (ABS), posted more falls in both owner-occupied and investor finance commitments. According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) fell by 0.6% in November in seasonally adjusted terms and has fallen 10.0% over
By Leith van Onselen Amid the slump in consumer sentiment and the apparent tanking of retail sales over Christmas, Robert Gottliebsen (“Gotti”) has hit the panic button. From The Australian: In the years leading up to the second half of 2018 we went through a period where banks hosed money at people seeking a resident
By Martin North, Principal Analyst at Digital Finance Analytics: The latest data from our surveys indicates that around 40% of loan applications for mortgages were rejected in December 2018, compared with 8% a year prior, though on significantly lower absolute volumes. Households often made multiple applications when seeking a loan. The volume of applications across
This week’s LIVE webinar (12:30pm AEST, Thursday 17 Jan) – we explore the often overlooked world of BONDS. Join MB Fund’s Head of Investments Damien Klassen and Tim Fuller as we look at: – What are bonds and the different types available – How they should be classified and how to use them effectively –
By Leith van Onselen The REINZ has released its house price data for December, which revealed a 2.9% seasonally adjusted fall in the national median house price, with prices up just 1.7% year-on-year: Outside of Auckland, seasonally adjusted house prices fell by 1.1% in December, with prices up 6.5% year-on-year. Looking at the major cities,
By Leith van Onselen The impossibility of Australia meeting its emissions target has been laid bare by lecturers at Deakin University. From The Conversation: In signing the Paris Climate Agreement, the Australian government committed to a global goal of zero net emissions by 2050. Australia’s promised reductions to 2030, on a per person and emissions
By Leith van Onselen From Bloomie comes analysis on how a synchronised housing bust is developing across global cities once considered ‘safe havens’: In Manhattan, the median condo price dipped below $1 million for the first time in three years. Hong Kong home values endured their longest losing streak since 2008, while prices in outer London neighborhoods fell for the first
By Leith van Onselen CoreLogic’s daily house price index for 16 January, released yesterday, revealed that Melbourne dwelling value declines have hit 8%: The below chart shows how Melbourne’s price decline compares against prior price corrections: As you can see, Melbourne’s current downturn is fast approaching the 2008-09, 2010-12, and 1989-92 episodes. In fact, if
By Chris Becker With the Brexit Parliamentary vote now a distant memory, and the US government shutdown pressing on regardless – with no key economic data being released as well – markets are focused on other matters like earnings reports, which have buoyed US stocks overnight. Stability came back to Pound Sterling while the USD
Via Damien Boey of Credit Suisse: In our recent article “Crying wolf against the little engine that could” dated 15 November 2018, we suggested that domestic demand growth would slow sharply, and that the RBA could be forced to cut rates in response. We have updated our proprietary activity tracker used in the article, for
by Chris Becker Here’s the latest price update from the iron ore complex, with spot prices up nearly 1% bringing the current rally close to a bull market response (i.e 20% plus) while Dalian futures also edged but the 12 monthly SGX price retreated: Aussie extractors are getting even better margins as the price keeps climbing
By Leith van Onselen Things have gone from bad to worse for Australia’s apartment market, with firefighters identifying 10,000 buildings along Australia’s east coast with suspected flammable cladding. From The Australian: Firefighters have drawn up a hit list of up to 10,000 buildings across the eastern states with suspected highly flammable cladding… Combustible aluminium polyethelene,
