Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
From The Conversation. We just learned America’s rental affordability crisis is as bad as it’s ever been. Unfortunately, it’s about to get a whole lot worse. The American Community Survey for 2014, released a few weeks ago, found that the number of renters paying 30% or more of their income on housing – the standard … Continue reading “America’s rental affordability crisis is about to go from bad to worse”
In her opening Statement to House of Representatives Standing Committee on Economics Inquiry into Home Ownership, Luci Ellis, Head of Financial Stability Department makes a telling point. From the RBA’s perspective, financial stability is more important than easing lending standards for first time buyers. They also recognise that the rise of investors is pushing prices … Continue reading “RBA Says Financial Stability More Important Than More FTB Housing Entry”
From The Conversation. Until recently, affordable housing was mentioned only in conversations involving low-wage or unemployed workers – or the homeless. The only groups that focused on rising rental costs were low-income housing advocacy groups. That has now changed. For the first time since possibly the Great Depression, the lack of affordable housing is being … Continue reading “Affordable housing crisis is hurting all of us (except the well-heeled)”
From The Conversation. Housing affordability continues to be an issue of importance to voters, with a recent Fairfax-Ipsos poll showing 69% of Australian capital city residents disagree that housing is affordable for prospective first home buyers. Different countries have adopted varying approaches to improve access to affordable housing – with governments playing a central role … Continue reading “Five Reasons Housing Is More Affordable Overseas”
The residential building industry is being weighed down by excessive and inefficient taxation, beyond just Stamp Duty, says the Housing Industry Association (HIA). In some states the total tax bill amounts to over 40 per cent of the final price of a new home, taxes on new housing are a brake on economic activity, and … Continue reading “Stamp Duty One Part of a Bigger Problem for Housing – HIA”
Moody’s Investors Service says that underwriting discipline and capital are key variables in maintaining the health of bank credit profiles in Australia, in the face of rising housing market imbalances. “Rapid house appreciation, particularly in Sydney, as well as lending imbalances are increasing the risks of a housing market correction,” says Ilya Serov, a Moody’s … Continue reading “Housing Market Imbalances Pose Long-term Challenges for Australian Banks – Moody’s”
The final Senate report into Affordable Housing was released today. The report is more than 450 pages long (including appendices), and the 40 recommendations cover a wide range of issues, including coordination and management across states and territories; developing a long term national plan; phasing out stamp duty; new funding options; urban planning; land supply; … Continue reading “Senate Delivers Final Affordable Housing Report”
Fresh on the heels of the FSI report, the core thesis of which is that the Australian Banks are too big to fail, so capital buffers must be increased to protect Australia from potential risks in a down turn (a “mild” crash could lead to the loss of 900,000 jobs and a $1-2 trillion or … Continue reading “Housing Finance Regulation – Tweaked, Not Reformed”
The RBA made a statement today to the Inquiry into Affordable Housing. Several points to note: 1. They recognise the high price to income ratio we currently have, but also state that low rates make larger mortgages affordable. the ratio of housing prices to incomes is at the top of its historical range; but over … Continue reading “RBA Highlights Housing Supply Issues And Lending Regulation”
The RBA today published a discussion paper entitled Is Housing Overvalued? This is an important question, given The Economist (2013) and the OECD (2013) report that Australian house prices are 24 per cent and 21 per cent ‘overvalued’, respectively. The report makes the point cost to income ratios are meaningless unless you know the cost … Continue reading “No Housing Bubble In Australia – RBA”