Melbourne apartment developer and AFR rich lister, Tim Gurner, has attacked the emerging ‘build-to-rent’ sector, describing it is “economically stupid” and will “wipe out mum-and-dad investors”: “I am incredibly against build-to-rent, purely because I think economically, it’s a stupid model in the sense that a 4.5 per cent return on costs [the magic number according
CoreLogic weekly leading indexes. Listings have started to rise though the stock is still falling so clearance rate must be OK: Owner-occupier mortgages are still up marginally year-on-year but the base level is low: Not much to fear for price rises here. Add falling investor mortgages and it’s still down for prices. Full report.
The construction sector employs more than one in every 10 Australians, but it has lost almost 7% of its workforce since March because of the impact of COVID-19. With the Morrison Government expected to this week announce a stimulus package for the sector, centred around grants to those who buy newly built homes and renovations,
Via the excellent Damien Boey at Credit Suisse: Two different approaches to modelling ASX 200 earnings, with two different answers. We use two different top-down approaches to explain and predict the cycle in ASX 200 real earnings per share (EPS). The first simply correlates market real EPS with economic activity as measured in the national accounts. The second is more
The ABS has dumped a whole bunch of partial data which paints a mixed picture for March quarter GDP, which will be released tomorrow. On the negative side, inventories declined by 1.2%, versus an increase of 0.3% last quarter. This should detract 0.4% to 0.5% from GDP: On the positive side, the ABS expects a
AMP Capital chief economist, Shane Oliver, has trimmed his forecast for Australian dwelling value declines, now predicting falls of between 5% and 10%: Key Points: Australia capital city home prices fell -0.5% in May. Significant policy support & the earlier reopening of the economy have made our worst-case scenario for a 20% decline in average
Within today’s dump of balance of payments data that feeds into tomorrow’s March quarter national accounts release was the important news that Australia’s terms-of-trade unexpectedly surged by 2.9% in seasonally adjusted terms. This result was unexpected because it contradicted both the RBA’s index of commodity prices, which fell by 2.3% over the March quarter: As
Bill Evans from Westpac trying give himself a new purpose:
If America were a society of browbeaten conformists like Australia then riots would unquestionably favour the opposition. But will it be so in a state defined by personal power? Recent polling has Biden with a comfortable lead as Trump slides on the COVID-19 policy disaster: But the lead is far from huge. Trump is actually
Via the AFR: [6%] is the amount by which analysts expect Wall Street’s earnings per share to fall in the fourth quarter of 2020 from a year earlier. …“I don’t know whether investors believe the forecasts they are looking at. I don’t know how long it’s going to take it for the market to wake
Via The Australian: A long-serving Andrews government staffer with links to the highest levels of the Chinese Communist Party’s United Front Work Department has posted a series of articles and videos on social media suggesting coronavirus was created by the US and transported to China by the US Army. The comments from Nancy Yang, who
Via the AFR: Grants to stimulate the residential construction sector will be means-tested to include upper-middle-income singles and couples, and will be in place for only a short period to try to avoid causing a blowout in house prices. The construction package, to be signed off on Tuesday by the expenditure review committee, is one
PwC partner Stephen Longley expects a surge in retail collapses once the federal government’s JobKeeper wage subsidy scheme ends in late September. Longley has been appointed administrator of retailer PAS Group, which went into voluntary administration on 29 May. Meanwhile, KPMG restructuring partner James Stewart forecasts the use of what he terms ‘tactical’ administrations, whereby
Abul Rizvi, former Deputy Secretary of the Department of Immigration and one of the architects of Australia’s faux ‘skilled’ migration program, continues to shill for a ‘Big Australia’, this time arguing that the nation faces an ageing population and a decline in the birth rate if restrictions on overseas migration are not eased: A slump
ANZ-Roy Morgan Australian Consumer Confidence gains for the 9th week in a row, with the ‘current economic conditions’ sub-index up 15.7%. pic.twitter.com/zZ1bcDjrWH — ANZ_Research (@ANZ_Research) June 1, 2020
By Chris Becker Stock markets continue to diverge from economic reality with Wall Street lifting higher despite rising civil unrest and growing tensions with China over Hong Kong and other trade disputes. The latest ISM manufacturing survey had some glimmer of hope within but still showed extremely weak conditions across the US as unemployment ravages
Iron ore prices for June 1, 2020: Spot somehow fell despite runaway futures which then reversed overnight. The surge is driven by a combination of recovering Chinese demand as empty apartments blossom with infrastructure: The steel PMI launched back into the positive at 50.9 with new orders surging to 52.6: Leaving China short of the
I have warned over and again. All of the gushing drivel from Nev Power, Andrew Liveras and others about a manufacturing revival was based upon false assumptions. We did not fall to the lowest industrial output in the world by accident. It was a maniacal experiment in macroeconomic policy that did it and nothing will
DXY was soft last night: The Australian dollar was a raging bull: Gold is poised at the break out line: Oil piles it on: Dirt popped but it is rubbish: Unless it is Pilbara magic dirt: Junk is wildly bid: Bonds were soft: Stocks power on into the great fakeflation: Westpac has the wrap: Event
Ian Marshman and Frank Larkins from the Centre for the Study of Higher Education at the University of Melbourne have released research assessing which Australian universities are most exposed to the downturn in international students. Below are key extracts: Summary The predicted revenue losses of 38 Australian universities to 2024, as a result of the
APRA has released its weekly update on the federal government’s early superannuation release policy, which reveals that another $1,590 million funds were withdrawn in the week ending 24 May, with total withdrawals topping $12.2 billion: As illustrated above, just over 1.6 million applications have been paid averaging $7,252. Breaking down withdrawals at the individual fund
The RBA has released its commodity price index for May, which rebounded 1.8% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – but slumped by 7.4% over the year: Preliminary estimates for May indicate that the index increased by 1.8 per cent (on a monthly average basis) in SDR terms, after
Global Macro / Markets / Investing: Uber Destroys More Value: Demolishes Bikes from Failed Rental Businesses Rather Than Donate Them – Naked Capitalism Citi warns markets are out of step with grim reality – FT Coronavirus is our chance to completely rethink what the economy is for – The Guardian Bitcoin Mass Adoption Would Benefit
A modest start to the week as Chinese equity markets react to the wet lettuce rhetoric from Trump on China’s boot on Hong Kong’s neck as most capital cities in the US burn, which should send housewares/DIY/retail stocks up when Wall Street opens later tonight. The USD is falling sharply, particularly against the Aussie dollar,
Lordy, this is what a commercial property crash looks like. Via VCX: These are not run-down suburban malls we’re talking about. This is the Strand Arcade, Chadstone and DFO. With values down 11-13% in four months, you’d be hard-pressed to say that this is the bottom. There has been some rebound in foot traffic but
Via The Economist: It is not hard to find Chinese who cheer the foreign ministry’s pugnacious new style. Against that, some members of China’s foreign-policy establishment express alarm over this assertiveness, calling it a mistake born of inexperience. That is letting foreign ministry hotheads off too easily. A well-travelled bunch, China’s quarrel-picking diplomats know how
The NSW and VIC state governments have reportedly joined forces to axe stamp duties in favour of an annual land tax: Stamp duty would be gradually replaced by an annual land tax and home buyers could “opt in” to a new property system or receive a credit for past duties, under reform options for the
SQM Research’s managing director, Louis Christopher, has doused hopes for an imminent rebound in the Australian property market: “It’s starting to look like it’s [auction clearance rates] topped out. If that is the case then what this reveals is that for now [it’s] a weaker market, a market that is very patchy”… “There’s not strong
The ANZ’s head of retail and business banking, Mark Hand, suggests that 2021 will be a very difficult year for small businesses. Plank claims many small and medium enterprises will not recover from the COVID-19 crisis, even with loan deferrals from banks and wage subsidies from the federal government. He says the best move for
Via the excellent Damien Boey at Credit Suisse: US household saving rate at 33%! A lot happened in April. There was a very sharp downtun in the labour market, households received an enormous boost to disposable incomes from fiscal stimulus, and consumers significantly pared back their spending amid shutdown restrictions. The net balance of these forces
