A nation of savers. Life premiums to rise as claims jump. McKell Institute report Housing affordability PDF. The slow death of the housing dream. Housing shortage a myth, bears claim. Some see an oversupply of up to 250,000 dwellings on the market.
Photo: Paul Rovere. Housing Shortage. Vested interest spruikers claim the Aussie house price problem is caused by a 'severe shortage' of houses and that we're 'running out of land'.
Why Australia's housing balloon is shot. Australia on the verge of rental crisis. House prices stabilise in March quarter. Zoning laws and property rights. A couple of weeks ago, I sat down and read Matt Yglesias’ The Rent Is Too Damned High and Ryan Avent’s The Gated City back to back.
Both were a pleasure to read, for their content, and for the opportunity to kick a couple of bucks to two of my fave bloggers behind an ennobling veil of commerce. Housing shortage will turn dire by 2020. Housing shortage a furphy we should not blindly accept. Residential - Australia's housing bubble is finally ending: Steve Keen.
Mortgage debt is by far the largest component of debt in Australia today—government debt, which is the focus of political debate, is trivial by comparison (a quick caveat though—finance sector debt may be larger again than mortgage debt, if this claim, sourced from Morgan Stanley, is accurate— since it shows Australia’s aggregate private debt ratio as almost equal to the USA’s).
The household debt to income ratio may have topped out now, after growing fivefold in the last two decades. Figure 2 shows the ratio of household debt to disposable income, which peaked at 149% of disposable income back in late 2008. Despite the enticement into debt given by the first-home vendor's boost, aggregate household debt never exceeded this pre-boost peak as a percentage of disposable income, since the fall in personal debt outweighed the rise in mortgage debt.
This huge rise in household debt compared to income has more than offset the falls in interest rates that occurred since the 1990s. Observations of an economist environmentalist: UPDATE - A chronic housing shortage: Myth or reality? I tried to contact Christopher Joye and Business Spectator to promote my previous post, which tried to unravel the mysterious reason for making dramatic claims of a chronic housing shortage.
I would like to think that today’s comment by Joye at Business Spectator is in some way connected with my own analysis, but doubt it. He does not address the concerns I raised of defining the term shortage, nor does he address why house prices declined during 2008, or why the rate of price growth is slowing. He does address a point that I have not made, about the large number of unoccupied dwellings in the census data, but I agree with his point about that data.
Instead, I will have to take it as an expansion of his general argument. Observations of an economist environmentalist: UPDATE 2 - A chronic housing shortage: Myth or reality? This is my final post on the housing shortage debate.
After a little probing, I have isolated the single point that leads astray the data rich, but theory poor, residential property analysts. It is this. Housing shortage proponents believe that housing supply is not very responsive to price changes, or the jargon, supply in inelastic. As such, we can expect another house price spike as we wait for supply to catch up with expanding future housing demands.
HIA warns of crisis in housing. Pessimism is building: Housing starts look like falling for the seventh time in nine years.
Photo: Louise Kennerley THE number of new homes being built will plummet below levels seen during the 2008 global financial crisis if current building approval trends persist, a housing body forecasts. Housing starts were forecast to fall by 12.4 per cent in 2011-12 to 137,820, following a decline of 5.6 per cent in 2010-11, the Housing Industry Association's quarterly National Outlook for Residential Building said. Housing affordability reaching crisis levels. Posted Thu 29 Mar 2012, 9:06pm AEDT The Australian Council of Social Service (ACOSS) national conference has heard that the lack of affordable housing has reached crisis levels.
Housing experts say there is a shortfall of tens of thousands of social housing homes - a number that will grow unless funding increases. The new Housing Minister Brendan O'Connor told the conference he was there to take suggestions about how to tackle Australia's housing affordability problems. He said the Government needed to explore future options "with an opening and enquiring mind". But his open mind closed quickly when it came to the question of reducing negative gearing and capital gains tax concessions. Can banking take us all down? Housing's purchasing power surge. Disposable house price myths. ASX flags longer hours, easier listings. ASX makes peace with advisers over code. ASX may lose its monopoly on clearing. It may be the calm before the storm. Growth + income hard to find.
The outlook for shares has brightened but fears remain over growth and profitability.
Photo: Jim Rice Brendon Lau The mood on the market may have brightened considerably this year, but there is still much confusion when it comes to the question of whether growth or income stocks are the place to be for the next year. The tug of war between the two schools of thought essentially comes down to assumptions about where world growth is heading – with investors’ minds focused on worries about a hard landing in China, the sovereign debt crisis gripping Europe, the high oil price sparking a global recession and the sustainability of the US economic recovery.
Short bonds, long equities are clear winners. Fed puts stocks in sweet spot. Shares retreat after global sell-off. Ratings agencies eye Swan’s budget. Positive growth measures spare austerity pain. Tanner fears Canberra super intervention. Patrick Durkin and John Kehoe Former federal finance minister Lindsay Tanner has warned that the government may be forced to intervene to shift the bias of superannuation funds away from shares to corporate bonds.
He criticised the $1.3 trillion super industry for putting the public’s savings at risk because of its narrow investment focus, which he likened to betting everything “on black at the casino”. “You are dealing with millions of individuals and their retirement living,” Mr Tanner said yesterday. “Minimising the extent to which individuals are going to really suffer badly, as some did during the global financial crisis and saw the value of their portfolios disintegrate underneath them, that is an important dimension.” In a rare foray into public policy debate since leaving office in 2010, Mr Tanner told the Ownership Matters conference in Melbourne he had examined the reasons for the lack of a corporate bond market in Australia since taking a position at investment bank Lazard. Economists seek PRODUCTIVITY reform. The Reserve Bank of Australia board left interest rates at 4.25 per cent for a fourth straight month yesterday, disappointing businesses and householders.
Photo: Louie Douvis Jason Murphy Economists have called for a long-term reform plan to make labour laws more flexible and reduce handouts to failing industries, after the central bank linked interest rate cuts to further productivity growth. The Reserve Bank of Australia board left interest rates at 4.25 per cent for a fourth straight month yesterday, disappointing businesses and householders. It hinted that inflation was well enough contained for it to consider future rate cuts that would depend on key data on prices on April 24. Australia taps US for skilled workers. Cities unprepared for freight growth. Apple Must Split Its Stock. Apple: Arguments Against A Dividend, Stock Split And Buyback. One of the most controversial debate topics in the investment community is what Apple (AAPL) should do with its cash. Should it pay a dividend, or should it shy away from redistributing its cash?
And what about a stock split, or buying back shares? Surely after a move into triple digits, a stock split will make it easier for small investors to buy. Apple can certainly afford to buy back stock, given that it holds so much cash. CSIRO wins legal battle over wi-fi patent. Updated Mon 2 Apr 2012, 8:23am AEST The Federal Government has described a multi-million-dollar legal settlement over CSIRO's wi-fi technology as a major boost for the organisation. The settlement secures more than $220 million for CSIRO, which invented the technology in the 1990s. Wi-fi technology is used in more than 3 billion electronic devices worldwide, including personal computers, video games and mobile phones. Respite for some from Basel III. ANZ wins mortgage battle with peers. Japanese banks have yen for Oz. Think China, think long term. China’s No.1 priority to boost consumption: Li.
Big banks push for ‘notional’ weekends. BMA declares ‘force majeure’ on coal exports.