Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
From The Conversation. Australia’s economy grew by just 0.2% in the June quarter, below expectations of 0.4%, largely as a result of reduced mining and construction activity and a decline in exports of 3% during the quarter. Nominal Gross Domestic Product grew by 1.8% during the year, which the Australian Bureau of Statistics said was … Continue reading “Australia’s economy is slowing: what you need to know”
Excellent speech from Lawrence Schembri, Deputy Governor, Canadian Association for Business Economics on house price trends. The speech, which is worth reading, contains a number of insightful charts. Australian data is included. He looks at both supply and demand issues, and touches on macroprudential. You can watch the entire speech. I have highlighted some of … Continue reading “The Long-Term Evolution of House Prices: An International Perspective”
In the RBA’s latest Statement on Monetary Policy, they explore the impact of off-set accounts on the total household debt outstanding. The increase in housing credit growth over recent years has been accompanied by rapid growth in loan products that provide borrowers with access to offset accounts. Offset accounts are a type of deposit account … Continue reading “Is Housing Credit That High?”
From The Conversation Fact Check: According to the 2015-16 Federal Budget, Australians paid around A$176 billion in personal income taxation in the 2014-15 financial year (Table 5 of Budget Paper 1). The Treasurer, Joe Hockey, claims that around 50% of this taxation is paid by the top 10% of the working age population as ranked … Continue reading “Is 50% of all income tax in Australia paid by 10% of the working population?”
The ABS released the latest national accounts, to March 2015. The Household Finance and Wealth data confirms again what we know, overall household net worth is up (thanks to asset appreciation) but savings are down. At the end of March quarter 2015, household net worth was $8,090.9b, made up predominantly of $5,451.8b of land and … Continue reading “Household Net Worth now over $8 Trillion, but Savings down”
From The Conversation. Australians know that adequate savings can help provide for a rainy day, help a family put down a deposit on a home, or ensure a comfortable retirement. Debt also offers a way for households to make purchases that would otherwise be impossible and to achieve a higher current standard of living. Debt … Continue reading “Australians are saving more, but are more comfortable with debt”
From The Conversation’s “Looking inside the sausage machine.” NATSEM’s analysis of the 2015-16 federal budget, the same as used by the Howard and Rudd–Gillard governments as a policy tool, has been likened by Treasurer Joe Hockey to a sausage machine. What makes Hockey’s analogy particularly striking is its applicability to this year’s budget process. While … Continue reading “The Budget is Still Unfair – The Conversation”
An article by Cameron Kusher, CoreLogic RP Data senior research analyst highlights that according to data from the Reserve Bank the ratio of household debt to disposable income is 153.8% and the ratio of housing deb to disposable income is 140.3% both of which are record highs. Each quarter the Reserve Bank (RBA) publishes selected … Continue reading “Australian Mortgage Holders Sensitive to Interest Rate Movements – CoreLogic RP Data”
In December 2014, The Bank For International Settlements issued proposed Revisions to the Standardised Approach for credit risk for comment. It proposes an additional level of complexity to the capital calculations which are at the heart of international banking supervision. Comments on the proposals were due by 27 March 2015. These latest proposals, which have … Continue reading “Basel IV – Is More Complexity Better?”
The Reserve Bank of New Zealand just published an interesting report on this important topic. High and rapidly rising levels of household debt can be risky. A high level of debt increases the sensitivity of households to any shock to their income or balance sheet. And during periods of financial stress, highly indebted households tend … Continue reading “Economic Implications of High and Rising Household Indebtedness”