Think The Unthinkable – The Property Crash We Have To Have?

In past years we have been highlighting the misaligned policy settings which have allowed home prices to balloon, household debt to soar, interest rates to slide and investors to gain more than a third of the market, higher than UK or USA. As banks have continued to lend and inflate their balance sheets and bolster … Continue reading “Think The Unthinkable – The Property Crash We Have To Have?”

Mining Areas Are Taking A Property Hit

From Reuters. Australia’s quarter-century run of uninterrupted economic growth has made its property market one of the world’s most expensive, but mortgage pain in towns hit by a commodities downturn is beginning to be felt in parts of the financial system.   While most Australians are able to pay their debts, alarm bells have sounded … Continue reading “Mining Areas Are Taking A Property Hit”

More High Home Price Evidence

The Economist updated their home price data series. Further evidence Australia’s home prices are look severely overpriced. Buyers, beware, and also consider the underlying reason why this is occurring. Limited supply, and negative gearing are a smart part but other deeper, more structural factors are also in play. PROPERTY is as safe as houses, at … Continue reading “More High Home Price Evidence”

Economy grows 1.1 per cent in December quarter

So Australia dodged the “recession bullet” thanks to a rebound in the December quarter. It was helped by resources sector income from higher prices especially coal and iron ore,  households who raided their savings to lift expenditure over the Christmas season, and Government sector infrastructure spending. But the underlying contribution from business excluding resources looks … Continue reading “Economy grows 1.1 per cent in December quarter”

How renting can fix the UK’s broken housing market

From The Conversation. How to fix the UK’s housing crisis has been the subject of national debate for decades. Universal home ownership is a popular goal, which successive governments have failed to achieve. This is largely because they have been faced with the paradox of increasing the supply of affordable housing while not encouraging house … Continue reading “How renting can fix the UK’s broken housing market”

Real US GDP Drops in 4Q – Initial Estimate

US Real gross domestic product (GDP) increased at an annual rate of 1.9 percent in the fourth quarter of 2016 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.5 percent. The Bureau emphasized that the fourth-quarter advance estimate released today is based … Continue reading “Real US GDP Drops in 4Q – Initial Estimate”

One in five homeowners will struggle with rate rise of less than 0.5%

From News.com.au ONE in five Australians are walking such a fine mortgage tightrope that they could lose their homes if interest rates rise by even 0.5 per cent. Our love affair with property has pushed Australia’s residential housing market to an eye-watering value of $6.2 trillion. But as we scramble over each other to snap … Continue reading “One in five homeowners will struggle with rate rise of less than 0.5%”

Fitch puts Australian banks on negative watch

From Business Insider. Fitch Ratings has revised its outlook on Australia’s banking for 2017 to negative from stable. In its 2017 outlook report, the agency says the change reflects an increase in macroeconomic risks and pressure on profit growth. The change follows Moody’s which in August last year changed the outlook for the banking system … Continue reading “Fitch puts Australian banks on negative watch”

Analysis of Mortgage Risk Under Basel

The Bank of England just published a staff working paper “Specialisation in mortgage risk under Basel II“.  Lenders using the less sophisticated risk models (generally smaller banks) are found to have a higher concentration of higher-risk mortgages than those using the advanced models. They looked at the two models which were introduced under Basel II, … Continue reading “Analysis of Mortgage Risk Under Basel”

Are the rich really getting poorer and the poor getting richer?

From The UK Conversation. The median UK household is better off. The poorest households are doing even better than the median, and the richest households have been the greatest losers. At least that’s one way to read the headline statistics put out by the Office for National Statistics (ONS) on January 10 in a new … Continue reading “Are the rich really getting poorer and the poor getting richer?”