Everything worth knowing in less than a minute:
High-rise era
Australia is in the middle of a housing boom, but it’s all about the high-rise baby. Dwelling approvals for 4+ stories are through the roof. Watch this space. If an oversupply will open up anywhere it will be here first…
Foreign Buyers go next level
FIRB-approved applications for foreign investment in housing doubled (+102% y/y) in 13/14 to a record high $34.7bn. Within this, the majority 78% share was directed to new housing at $27.2bn (spiking 152% y/y) – of which a 79%+ share was concentrated in NSW and Victoria alone.
And my guess it has a lot to do with the boom in high-rises above…
Unemployment steady(ish)
The unemployment rate edged up to 6.2%. Still healthy. Going nowhere. Compare it with the US and see the bullet we dodged.
Retail Trade Solid
Retail trade was up 4.5% over the year – that’s a pretty tidy result. Driven by spending on household goods, which tends to reflect household confidence.
Banks cop a bashing
Bank stocks were hit during the week, with weaker profits than expected (though still pretty freakin massive)…
… and rumours that banks are planning voluntary caps on lending to investors to avoid APRA getting heavy handed with them.
The Budget Cometh
Everyone’s watching Canberra this week ahead of the budget. Rumours are Hockey’s been sidelined and Cap’n Tony has chaired every meeting.
The last projections we saw expected a feeble return to surplus in 2020. That was before the collapse in commodity prices. This one must be worse, but will probably see a similar projected return to surplus…
… but if you believe that, I’ve got a bridge in Sydney going cheap.
RBA gets all social media-y
The RBA has launched decisively into the 21st Century, and has started publishing ‘infographics’ on the state of the economy. Share with your friends.
The Thirsty Country
Stats show that alcohol consumption (per person) in Australia has fallen to a 50-year low.
Beer consumption has been falling for a long time now, but in recent years, wine has also started falling (though I personally feel I’ve been pulling my weight).
Sometimes I wonder what is happening to this great country of ours.
Have a great week everyone.
JG
Jack says
Right on John.
One of our export successes over the past 3 decades has been education (ok. Maybe cut out a few [Indian] hiccups). We used to have many other successful exports and eventually taught our markets to do what we do, but better (and/or cheaper). How long will it be before we teach our education export markets to teach themselves better (and/or cheaper) ?
The over supply that you’ve heralded above has been largely (mainly) driven by the need to supply (substandard, in our 1/4 acre block vision) accommodation for this export market – the students. The accommodation is mostly one bed apartments of 30-40sqm (even smaller) apartments in highrises. The dwelling type you identified in your first paragraph.
When we’ve successfully exported our ability to teach to the markets we are educating, the need for this style of accommodation will disappear and we will have a glut of empty little boxes, with virtually no market and no value. This will have great effect on every other inner city high rise apartment and will flow on to the the rest of the property market to some degree.
Then the sh.. will hit the proverbial…
Andrew says
Awesome work John, I find these snippets very worthwhile you are delivering in the Monday Smack down
Tom says
Yet again, Jon, “Great Stuff”.
In passing, you alluded to our AUD/USD ratio.
In his efforts to bring the AU$$IE down, Big Bad Glen has been trying to push a giant load of sh*t uphill in a child’s toy wheelbarrow, with a tiny little wheel. The scale of the problem is too great for what tools he has at hand to work with.
With global inflation being deliberately encouraged by devaluation, through all the QE that’s been going on in the major fiat currencies, there is inevitably going to be a rise in the value of our AUD.
As you have pointed out before, instead of that QE cash being used as intended, to finance employment by small business, the bulk of it has been funneled directly into the hands of the uber-rich, (read “Bankers”). The rest has been sent overseas, to bolster small countries’ finances & trade. When those borrowings are eventually repatriated, there will be unprecedented inflation, which will send the AUD even higher.
We thought inflation was bad when Gough used it to pay for his unprecedented Government spending. In hindsight we’ll be saying that was just a practice run.