Digital Finance Analytics (DFA) Blog – Page 50

Housing Affordability Busted For Good…

Whatever announcables may come from the Government, the truth is housing crisis in Australia is far from over.

As I discussed with Leith van Onselen on Tuesday, high migration is the root cause of the problem – a problem created by bad policy and ultra-high migration. Yet some are arguing we should import more construction workers to build more homes. Sounds like shoot ready aim, to me.

Sure it is true that as Australia’s housing affordability crisis worsens, governments are spending more on housing. But as a recent The Conversation article says, without coordinated action to increase supply, government grants will have little practical effect on house affordability anytime soon.

Victoria’s Andrews government has announced a suite of reforms (such as boosting social housing and making planning processes faster) in an effort to get 800,000 extra homes in Victoria over the next decade.

Federally, the Albanese government’s A$10 billion Housing Australia Future Fund, or HAFF, has passed the Senate with the help of the Greens, who supported the bill in exchange for another A$1 billion for social housing.
And this year’s federal budget has expanded eligibility for the Home Guarantee Scheme so more people can buy a home with a smaller deposit.
But is Australia ready for a house construction boom?

Supply chain constraints say no. Ballooning construction costs and labour shortages have already claimed well-known building firms across the country. Delivering thousands of extra new homes in the coming years will not be easy.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

This Could Be A Crunch Week For Markets

This week we get Central Bank Decisions from the Bank of England, The Federal Reserve and the Bank of Japan. The European Central Bank delivered a 10th consecutive hike last week, though signaled that the peak may have been reached. We also are getting further floods of data, and we know that Central Bankers are being data dependent, perhaps too much so.

For example, a Bank of Canada official said she sees evidence higher rates are working to cool the economy, blaming a hotter-than-expected inflation reading on monthly volatility driven in part by energy and rental costs.

http://www.martinnorth.com/

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Will The Market Hammer Fall?

As I said recently, being data dependent means higher volatility as markets swing from bullish to bearish and back. While in Australia the bulls ran hard on Friday, later Wall Street experienced a significant notable downturn as investors responded to the news of a strike by the United Auto Workers against leading automakers Ford, General Motors and Stellantis. U.S. manufacturing output barely rose in August amid a decline in motor vehicle production before any industrial action starts.

Adding to the volatility was the fact that piles of derivatives contracts tied to stocks, index options and futures expired on Friday, compelling traders to roll over their existing positions or to start new ones. This time, it coincided with the rebalancing of benchmark indexes including the S&P 500, another catalyst for more share transactions.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Is Inflation Rising From Its Slumber?

New US inflation numbers came out, and they included at least some reasons for concern. The headline figure deteriorated for the first time in months rising 0.6% in the month and 3.7% year on year. The broadest picture, breaking down into food, energy, and core services and goods excluding food tells the story.

http://www.martinnorth.com/

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The Employment Numberwangers Are At It Again!

The latest from the ABS says the unemployment rate remained at 3.7 per cent in August (seasonally adjusted.

They said “with employment increasing by around 65,000 people and the number of unemployed only dropping slightly, by around 3,000 people, the unemployment rate remained at 3.7 per cent in August.

“The large increase in employment in August came after a small drop in July, around the school holiday period. Looking over the past two months, the average employment growth was around 32,000 people per month, which is similar to the average growth over the past year.

“The employment-to-population ratio rose 0.1 percentage point to 64.5 per cent, around the record high in June. The participation rate also increased, up to a record high of 67.0 per cent in August, which, together with the high employment-to-population ratio, continues to reflect a tight labour market,”

Monthly hours worked fell 0.5 per cent in August 2023 (following the increase of 0.2 per cent in July), while employment rose by 0.5 per cent.
Despite a small fall in August, hours worked were 3.7 per cent higher than August 2022, continuing to reflect faster growth than the 3.0 per cent annual increase in employment.

“The strength in hours worked over the past year, relative to employment growth, shows the demand for labour is continuing to be met by people working more hours, to some extent,” The ABS said.

But there are a few questions to consider about this data, compared to other information out there. The numberwangers are at it again!

Go to the Walk The World Universe at https://walktheworld.com.au/

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