Where to for the housing market in Spring?

A nice summary piece from CoreLogic’s blog. The housing market appears to be responding to a number of factors which have spurred further growth in home values.  Official interest rates are at historic low levels which has encouraged borrowing for housing and driven housing debt to record-high levels.  The low interest rate setting is also … Continue reading “Where to for the housing market in Spring?”

The legacy of Glenn Stevens in three lessons

From The Conversation. On September 18 2016, Glenn Stevens will end his ten-year mandate as governor of the Reserve Bank of Australia (RBA). His experience in the top job provides a wealth of lessons for the next generation of policymakers; that’s arguably his most important legacy. A graduate from the University of Sydney and the … Continue reading “The legacy of Glenn Stevens in three lessons”

Rate Cut Reactions

From The Conversation. The Reserve Bank of Australia has lowered the cash rate to 1.5% in an effort to stimulate growth, boost inflation and encourage a fall in the Australian dollar. The cut of 25 basis points from 1.75% is the last decision from outgoing RBA Governor Glenn Stevens. In a statement on the rate … Continue reading “Rate Cut Reactions”

Canadian Regulators Ups The Ante On Residential Mortgage Lending

According to Moody’s last Thursday, Canada’s Office of the Superintendent of Financial Institutions (OSFI) notified the country’s regulated mortgage lenders that it will intensify its supervisory oversight of their residential mortgage underwriting practices. In the past 10 years home prices in Canada have lifted more than in Australia, although the debt to disposable income ratio … Continue reading “Canadian Regulators Ups The Ante On Residential Mortgage Lending”

Australia could be about to lose its AAA rating, and here’s why

From The Conversation. Australia’s AAA credit rating was under pressure even before the election and is now looking decidedly shaky. Ratings agency Standard & Poors has moved Australia’s rating outlook from “stable” to “negative”, due to debt and a poor chance of budget repair. This follows warnings from the other major credit rating agencies – … Continue reading “Australia could be about to lose its AAA rating, and here’s why”

Household Debt Up Again

The latest RBA chart pack, released today includes data on household debt. Debt a a percentage of disposable income is up again, to an all time high. This is driven by flat income growth, and ever more home loan borrowing. Even after the May interest rate cut,  interest paid as a proportion of disposable income … Continue reading “Household Debt Up Again”

Getting Government Debt In Perspective

A good piece in today’s The Conversation, examines the claim that the current government has lifted net government debt by $100 billion. This is proved to be correct, with caveats. However, some perspective is required in the debate. As highlighted in the piece, an important measure is debt to GDP. On that basis, on an … Continue reading “Getting Government Debt In Perspective”

Household Debt Ratio Grinds Higher And Mortgage Discounts Rise

The latest RBA chart pack, just released, shows that household debt, as a percentage of disposable income continues to rise. Also from our analysis, banks are offering larger discounts again. RBA data shows interest payments are below their peak, but are also rising (though the May cash rate cut will have an impact down the … Continue reading “Household Debt Ratio Grinds Higher And Mortgage Discounts Rise”

GDP 3.1% But…

Latest ABS data shows that growth in the quarter was a strong 1.1% making an annual seasonally adjusted rate of 3.1%. However, the Net National Disposable Income (NNDI) measure shows another fall. In other words, whilst we are exporting more volume – and this quarter liquid natural gas was a stand-out, this greater activity did … Continue reading “GDP 3.1% But…”

In Australia, All That Glitters Isn’t Gold

From Bloomberg View. If Australia is an economic miracle — the so-called Lucky Country, beneficiary of more than a quarter century of uninterrupted growth — then its banks are its most visible sign of strength. After a near-death experience in the 1990s, they’ve reformed and bounced back dramatically: Returns on equity now average around 15 … Continue reading “In Australia, All That Glitters Isn’t Gold”