Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
From The New Daily. When Derryn Hinch told the ABC on Monday that “owning your own home is not an Australian right”, he was unwittingly throwing his weight behind a huge con. That con, in essence, is to convince voters that a major structural undersupply of dwellings is responsible for the current housing affordability crisis. The argument … Continue reading “Time to end the Treasurer’s ‘housing supply’ con”
From The NewDaily. Reports that the government is again considering hacking into superannuation to solve the housing crisis have angered experts and regular Australians alike. Anonymous sources within the Coalition have leaked to the ABC, The Australian and others that the plan is still in play, despite Treasurer Scott Morrison previously saying the government had no … Continue reading “Outrage at ‘really dumb’ resurrection of super-for-housing idea”
From The Conversation. The term “shadow banking” often has connotations of dodgy lending and borrowing practices, out of reach of regulators. And while its use may contribute to risk, in reality shadow banking does serve a purpose in our economy, one that is increasingly connected to our day-to-day lives. Shadow banking affects not only the … Continue reading “Shadow banking and where it came from”
The Conversation has published many articles by Australia’s foremost academics on policies that affect housing. In the lead-up to expected announcements in the federal budget in May, we review the arguments in the articles since January 2016 – 81 were identified, of which 58 concerned housing policy. This article focuses on the most frequently mentioned … Continue reading “What housing issues should the budget tackle? This is what our experts say”
From WSWS.Org. The Reserve Bank resisted calls for an interest rate hike last week, amid growing fears that the continuing rise of house prices is creating the conditions for a crisis across the property market that would have far broader ramifications. On Tuesday, the bank’s governor, Philip Lowe, announced that rates would remain at a … Continue reading “Mounting concerns over Australian housing bubble”
From The Australian Financial Review. Falling rents or loss of tenants could seriously jeopardise the financial viability of nearly 36,000 property investment portfolios around the country. Analysis by advisory group Digital Finance Analytics (DFA) highlights the danger of investors’ reliance on tenants to pay borrowing costs. More than one in three portfolios with Sydney property … Continue reading “One in three Sydney landlords risk income shortfall”
From The AFR. Ask respected property analyst Martin North what form the coming downturn in the housing market might take and “orderly” is not the description he uses. Instead North anticipates a much more significant downturn in the investor-driven, debt-laden markets like Sydney and Melbourne. “Orderly” is how S&P Global Ratings director Sharad Jain described … Continue reading “Housing correction ‘won’t be orderly’”
The AFR reports today that Scott Morrison is advocating increasing supply as the recipe to solve the current housing issues, and is standing firm against a crescendo of calls to curb negative gearing tax breaks (though may be more amenable to capital gains changes). I was reflecting on the current state of play, given RBA, … Continue reading “First Scramble the NBN, Now Housing”
Last October we wrote a series of posts on the risks related to interest only loans. Given recent developments, and the belated focus from APRA and ASIC, we revisit the topic today. Here is a plot from the APRA data showing the relative movement of investor loans and interest only loans. Yes, there is a … Continue reading “The Interest-Only Loan Debt Trap II”
From The Conversation. As the federal budget approaches, the government is grappling with ways to enhance housing affordability, including reforming the current 50% capital gains tax (CGT) deduction on property investment. The Economics Society of Australia (ESA) Monash Forum polled economists on this proposition: Capital gains tax deductions for housing investment should be removed because … Continue reading “Capital gains tax concession is too generous: economists poll”