Articles
Articles
Down South
Many might not know, but I give several presentations each year. Well, one per week on average, so maybe that is more than several. In a good year, it might top 100.
Like these missives, my presentations try to be direct; are usually flippant in parts (there is usually a cheeky slide or two, well often more) and sometimes the audience doesn’t like what is being said. Leonard Cohen grumbles about himself in a tune called Going Home off his new album Old Ideas…”he does say what I tell him, although it isn’t welcome.” Not a bad mantra, if you ask me. Read more
Unemployment
Last month – yes it is February already! – the mainstream media ran headlines proclaiming that no jobs were created across Australia during 2011 and the result was the worst in 20 years. No arguments there. Our unemployment rate remains at 5.2%, but the participation rate fell as job seekers have given up the search for positions. Read more
Missive Monday – New Zealand
I subscribe to STRATFOR – which, for mine, offers the best publicly available international geopolitical analysis. Their 2012 world forecast is worth a read. Don’t expect Australia to get a mention in the 18 page doco, as we don’t rate too highly on the world stage. Read more
Cargo Cult
This Missive is likely to get me shot, and mostly likely with both barrels, especially given that tomorrow is Australia Day…… but the Gold Coast 2018 Commonwealth Games is likely to do more damage than good. It is an absolute waste of money and diverts attention away from the things that really need doing. But that, of course, is part of the government’s plan. Since the birth of Christ, at least, it has been that way. Read more
Muddle
It is good to see – in an ever-increasingly uncertain world – that 2012 has started like most, with pundits making predictions about the coming year. Sadly, these forecasts are far from expert and are usually more erroneous rather than correct. Read more
Missive Extra – Poll #1 – GC 2018 GC
We all know that the Gold Coast won the right to host the 2018 Commonwealth Games. Congratulations to Mark Stockwell and his team.
This two-week event will be held in April 2018. Some amazing claims are already being made as to the impact of such an event on the Gold Coast market and economy. Whilst some statements seem to have gone through some rigour, others are just utter spruiking -“the Gold Coast will be exposed to billions of people around the world as preparations unfold in the lead-up to April 2018” and “property markets will reap rewards too” are two recent examples. Read more
Carbon tax (again)
The proliferation of information (spin really) about climate change and our own carbon tax doesn’t mean that it has become more understandable. In fact, the opposite rings true.
Who really knows what happened in Durban last month, except that the Kyoto Protocol has been taken out of its casket and put on critical life support; the Gillard government got a breath of fresh air; some carbon cutting decisions will be made in 2015 and then again in 2020; and $100 billion per year (yes $100b every year) will be spent on a Green Climate Fund. Our contribution – if financing is direct – towards this fund will be between $2b and $3b per year. Read more
Missive Extra – Numbers
After three weeks of zero tasking, it is finally time to kick off the New Year.
We’d like to wish you a very Happy 2012 and to share with you some of the stats from the Matusik Missive throughout 2011.
You may already have some sense that the Louvre Museum has 8.5 million visitors per year. But what you won’t know is that the Matusik Missive was viewed around 89,000 times in 2011…..which means that, if it were an exhibit in the Louvre, it would take about 4 days for that many people to see it. Read more
New vs Old
In spite of the battering that the residential market has taken of late, many Australians still aspire to own investment property.
When considering whether to buy new versus older property, price is only ever part of the equation.
And buying a new dwelling has numerous benefits over buying a second-hand property. Read more
Missive Extra - Boomer Bust
As we wrote last week, Australia is facing a demographic tsunami.
There are 5.3 million baby boomers (born between 1945 and 1964) and the oldest are now starting to retire. Read more
Affordability
Housing affordability has been in the headlines again, but this time around some seriously good research is the cause.
A new study for AHURI (Australian Housing and Urban Research Institute) strongly suggests that the traditional method of calculating housing affordability is out-dated and should be considered in conjunction with other ways of weighing up whether people can afford their mortgage or rent. Read more
ol’ fifty-five
OPPPS, Wrong year! Another stuff up! The sooner 2011 is over with the better!
It was supposed to be set to play on the 18th Jan 2012! Well you got this one a bit earlier than planned. Read more
House of horrors?
According to the economic journal, there are two ways to track valuations: price-to-rent ratio and price-to-earnings ratio. Just as a share price reflects a company’s future profits, house prices should reflect expected return. If both measures are well above their long-term averages, then the property market is overvalued. Read moreMissive Extra – Shrinkage
So interest rates have fallen again.
Hmmm, my first reaction is to start quoting the “shrinkage” part from The Hamptons episode from Seinfeld.
For those who aren’t Seinfeld fans – yes it is hard to believe but they do exist – below is the relevant segment of the script. I have also included a synopsis of the complete episode for the unenlightened among you. Read more
3rd Home
Apparently – well according to Luke or Matthew (I get so confused as to who said what in the Bible these days) – Jesus said to Satan, “Man does not live by bread alone, but by every word that proceeds out of the mouth of God!” Well, I don’t really know about the words from God either, but living on nothing much rings true. Read more
Off The Plan
There have been several short reports for public consumption of late, discussing off-the-plan buying. Most have been masquerading as buyer tips or advice, but they take a very pro-developer side of things. Read more
NRAS
To my surprise, very few investors (and sadly fewer property gate-keepers) know about NRAS. And if they know something about it, then they are dismissive of it. And mostly – I feel – out of fear and/or ignorance. Read more
A Tale of Two Buildings
Children grab your note books and gather around, I am going to tell you a story.
There were once two identical buildings – building A and building B. They sat side-by-side and remember they were exactly the same.
They each had 50 nice little apartments in them. Read more
The Big Nothing
Judging from the reaction in the media and from the usual suspects spruiking property, last week’s interest rate drop is the biggest thing since sliced bread. It’s going to boost retail spending; lift house prices and make Christmas a real bundle of joy. It is bordering on medicinal; stopping just short of a miracle. Read more
Boosted? Extra
Several readers made contact with us yesterday, asking if we knew about the actual distribution of the Building Boost applications across the state.
We have had a hell of a time getting such information out of the Government, with more than the usual amount of storm walling. Read more
Boosted?
Several subscribers made contact with us a few weeks back in response to our Hogtied missive. Most who replied were of the impression that the Queensland building boost would lift demand and help get more new development underway. Read more
Boo Hoo
There is little doubt that a fall in interest rates would have a positive impact on new housing starts. But, despite calls from the development industry for rates to drop today, there really isn’t any real need to build more new dwellings at present. Read more
Dense about Dwellings
There are three things that drive me – I like to be a lonely voice; I enjoy being a stick in the mud (and grumpy about it) and I am always more interested in what people do rather than what they say.
This somewhat self-centred introduction is an attempt to explain why I keep banging on about the need to change our urban planning policies in this country. We need to accept the fact that most don’t want to live in little air-conditioned boxes in the sky. I am not against high-density development – God knows my business has helped many of them come to fruition; it is just that the argument for anything else is losing its voice. Read more
Hogtied
Get your minds out of the gutter; the title has nothing to do with bondage, but sums up nicely how we are suffocating what little life is left in the new housing market in this country.
All economic activity is fuelled (and limited) by the availability of three things: land, labour and capital. The term “demand” can be interchanged with “labour” in some instances. Without all three components, economic activity does not grow – well, not as fast as it could. Read more
The EU
have had the pleasure of spending three and a half weeks walking through central Italy. Many have asked me since my return about what is happening over here in relation to the European Union (EU) and the euro.
The European condition (outside of Germany and maybe the Nordic block) can best be summed up in nine words – “the ruins proclaim that the city was once prosperous.” Read more
Amber Oz
Sadly, both parties, initially led by the Liberal Party and quickly followed by Labor under Julia Gillard, have opted for Little Australia. For generations, both political parties have done the right thing by Australia on population. They have strongly supported high immigration despite great reluctance from voters for it. Big Australia makes sense.
Cutting migration means higher interest rates in the short-term and higher taxes in the long-term as our population ages. As for house prices, well, don’t expect them to grow much, if at all. House price devaluation is a more likely outcome if we adopt Little Australia. Read more
Back In Black
Unfortunately, the title of this missive has nothing to do with the state of the residential market. It remains “dead, buried and cremated”. Remember this was originally written over a year ago. The Brisbane market, at least, is in a better position now. Read more
Big Homes
The boss and I are on a four-week break walking through Tuscany. Lucky us! Well it has been a long time coming…paid for years ago, but delayed twice over recent years due to work, or ironically the lack of it, and again with more than a touch of irony, we are now taking this trip just as our workload is increasing. In fact it is back to pre-GFC levels. A bellwether? Let’s hope so. Read more
Over, not undersupplied
Australia’s population growth has slowed by close to 150,000 in just two years, with a 100,000 drop in the actual growth rate over the last twelve months. As a result, the underlying demand for new housing has dropped from 180,000 starts per annum to around 125,000. Whilst dwelling starts are declining, we are now building too much stock. Read more
Out of context
The best measure of the data on residential prices, RPData-Rismark Hedonic Index, shows that Australian house prices fell just 0.2% last month. This equates to an actual drop of $1,200 against a median dwelling value of about $525,000. Even on a quarterly basis, the drop is just 0.9% or $4,700. Read more
Things have changed
I can outline many reasons why I think interest rates should have fallen earlier this year. These days, one's reasoning has the most cut through if summed up in pithy quips – "two-speed nation"; "gloom and boom"; "paradox of thrift"; "okay but not happy" or my current favourite, "RVO" – Real Versus Official – economy, that is. Read more
An independent opinion
Let’s face it, we don’t have expensive housing in Australia, we have expensive land. The average cost of residential land overtook the median cost of constructing a dwelling, across all Australian capitals, about five years ago. The difference between the two is now considerable and growing. Volume builders in Queensland are constructing quality new detached homes for well under $1,000 per square metre. Read more