Tag: ABS

Is The Housing Finance Worm Turning?

The ABS Housing Finance data for February 2015 was released today. The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.8%. Owner occupied housing commitments rose 1.0% and investment housing commitments rose 0.4%. This is the first time growth in owner occupied loans has exceeded investment loans for many months. As a result the proportion of investment loans dropped below 50% for the first time this year. The cut in RBA rates also stimulated demand for the refinance of existing loans. We also see the bulk of investors purchased established dwellings, not newly constructed property.

OOandINVSAFeb2015The trend data (which irons out monthly changes) held investment loans over 50%, but also registered a slight drop.

OOandINVTrendsFeb2015In trend terms, the number of commitments for owner occupied housing finance rose 0.2% in February 2015.  In trend terms, the number of commitments for the purchase of established dwellings rose 0.5%, while the number of commitments for the purchase of new dwellings fell 1.4% and the number of commitments for the construction of dwellings fell 1.1%. The number of loans to owner occupiers buying established homes, excluding refinancing, fell by 0.9 per cent.NumberofLoansByPurposeFeb2105The overall value of loans made in the month was a record $18 billion, excluding refinancing of existing loans. New construction was up about 2%.

ValueofLoansByPurposeFeb2015In percentage terms, refinance of loans increased slightly, relative to new loans.

ValueofLoansByPurposePCFeb2015 In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 13.7% in February 2015 from 13.6% in January 2015.

FirstTimeBUyersFeb2015If we overlay the DFA modelling of first time investor loans, overall first time buyer activity was up. Remember, also the data refers to loans, not property transfers, and we know form our surveys that additional purchases were made without the need for a mortgage by overseas investors, and local purchases cashed up thanks to the Bank of Mum and Dad.

FirstTimeBUyersAdjustedFeb2015Finally, the bulk of lending is being done by the banks, relative to credit unions and building societies. The total loans on book was $1.375 trillion.

Loan-ValueByLenderTypeFeb2015

It is also worth noting that building societies are lending a smaller proportion of investment loans, and the falling trend here, compared with the rising trend in the credit union sector, though both are well below the 34% of banks loan portfolio.

LoanStockByTypeFeb2015

 

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Retail Turnover Rises 0.7 per cent in February 2015

The latest Australian Bureau of Statistics (ABS) Retail Trade figures show that Australian retail turnover rose 0.7 per cent in February following a rise of 0.5 per cent in January 2015, seasonally adjusted.

In seasonally adjusted terms the largest contributor to the rise was food retailing (1.2 per cent). Household goods retailing (1.8 per cent) and other retailing (1.3 per cent) also recorded rises in February 2015. There were falls in department stores (-3.2 per cent), cafes, restaurants and takeaway food services (-0.4 per cent) and clothing, footwear and personal accessory retailing (-0.2 per cent).

In seasonally adjusted terms there were rises in all states and territories in February 2015. The largest contributor was New South Wales (0.7 per cent) followed by Victoria (0.8 per cent), South Australia (1.7 per cent), Western Australia (0.7 per cent), Queensland (0.2 per cent), the Australian Capital Territory (1.6 per cent), the Northern Territory (2.3 per cent.) and Tasmania (0.7 per cent).

The trend estimate for Australian retail turnover rose 0.3 per cent in February 2015 following a 0.3 per cent rise in January 2015. Through the year, the trend estimate rose 4.0 per cent in February 2015 compared to February 2014.

Online retail turnover contributed 2.8 per cent to total retail turnover in original terms.

Job Vacancies Up, But Rotating

The ABS released their data to February 2015 today. Total job vacancies in February 2015 were 151,600, an increase of 1.1% from November 2014. The number of job vacancies in the private sector was 138,400 in February 2015, an increase of 1.0% from November 2014. The number of job vacancies in the public sector was 13,200 in February 2015, an increase of 2.4% from November 2014. The rolling 12 month average was up 1.5%.

However, of more significant note are the state by state changes. We have calculated the rolling 12 month average, based on the state original data (no seasonal or trend adjustments). We see that whilst the percentage of vacancies rose in VIC (8.6%), TAS (7.1%), NSW (2.8%) and SA (2.7%), they fell in QLD (down 2.1%), WA (down 2.8%) and NT (down 9.3%). Looking back over previous quarters, we see a rotation towards the eastern states, and away from WA and NT. Another data point highlighting the transition underway from the mining states.

JobVacFeb2015

Building Approvals Up In February, Thanks To NSW

Australian Bureau of Statistics (ABS) Building Approvals show that the number of dwellings approved rose 1.6 per cent in February 2015, in trend terms, and has risen for nine months.

Dwelling approvals increased in February in New South Wales (5.4 per cent), Queensland (2.1 per cent) and Victoria (1.3 per cent) but decreased in Australian Capital Territory (16.2 per cent), Northern Territory (2.7 per cent), Western Australia (2.5 per cent), South Australia (2.4 per cent) and Tasmania (0.7 per cent) in trend terms.

In trend terms, approvals for private sector houses was flat in February. Private sector houses rose in New South Wales (1.8 per cent) and Victoria (0.7 per cent) but fell in South Australia (1.5 per cent), Western Australia (1.4 per cent) and Queensland (0.9 per cent).

The value of total building approved rose 1.0 per cent in February, in trend terms, and has risen for eight months. The value of residential building rose 2.1 per cent while non-residential building fell 1.4 per cent in trend terms.

New Vehicle Sales Up, A Little

The ABS released the February 2015 New Vehicle Sales data today. In trend terms, February 2015 (93 432) has increased by 0.2% when compared with January 2015, whilst the seasonally adjusted estimate (95 737) has increased by 2.9% when compared with January 2015.

Sales of Sports utility and Other vehicles increased by 0.7% and 0.1% respectively. Over the same period, Passenger vehicles decreased by 9 units, whilst the seasonally adjusted sales of Passenger and Other vehicles decreased by 0.9% and 0.3% respectively. Over the same period, Sports utility vehicles increased by 10.5%.

Feb-Vehciles-By-TypeFive of the eight states and territories experienced an increase in new motor vehicle sales when comparing February 2015 with January 2015 in trend terms. Tasmania recorded the largest percentage increase (1.7%), followed by Queensland (0.6%) and both Victoria and South Australia (0.3%). Over the same period, Western Australia, the Northern Territory and the Australian Capital Territory all recorded decreases in sales of 0.3%.

All states and territories experienced an increase in new motor vehicle sales when comparing February 2015 with January 2015 in seasonally adjusted terms. The Northern Territory recorded the largest percentage increase (22.4%) followed by South Australia (8.8%) and the Australian Capital Territory (5.9%).

Unemployment Stays at 6.3% (Trend) – ABS

The ABS released the Labour Force data for February, today. Australia’s estimated seasonally adjusted unemployment rate for February 2015 was 6.3 per cent, compared with 6.4 per cent for January 2015. In trend terms, the unemployment rate was unchanged at 6.3 per cent.

The seasonally adjusted labour force participation rate decreased to 64.6 per cent in February 2015 from 64.7 per cent in January 2015.

The ABS reported the number of people employed increased by 15,600 to 11,652,400 in February 2015 (seasonally adjusted). The increase in employment was driven by increases in both full-time (up 10,300) and part-time employment (up 5,300). Seasonally adjusted employment increased for both males (up 9,300) and females (up 6,300) in February 2015.

The ABS seasonally adjusted aggregate monthly hours worked series increased in February 2015, up 13.0 million hours (0.8%) to 1,620.8 million hours.

The seasonally adjusted number of people unemployed decreased by 15,800 to 777,300 in February 2015. The decrease was driven by those looking only for part-time work, down 18,600.

The seasonally adjusted underemployment rate was 8.6 per cent in February 2015, a decrease of 0.1 percentage points from November 2014 based on unrounded estimates. Combined with the unemployment rate of 6.3 per cent, the latest seasonally adjusted estimate of total labour force underutilisation was 14.9 per cent in February 2015, a decrease of 0.1 percentage points from November 2014.

Note that The February 2015 data incorporates estimates rebenchmarked to the latest population estimates and projections. Commencing from the May 2015 issue this will be a regular quarterly process which will ensure that the Labour Force series reflect the most up to date population benchmarks. So further tweaks to the data have been made, making series comparisons difficult.

First Time Buyer Investors On The March

The ABS published their Housing Finance to January 2015. Total lending for housing (both investment and owner occupied lending) lifted the stock 0.6% to $1.37 trillion. Investment rose 0.8% and owner occupied loans rose 0.5% in the month. Investment loans are close to 34.5% of all loans, a record.

ADILendingStockJan2015Looking at the changes in volumes by type, we see that the purchase of existing dwellings is rising, but refinancing, construction of new dwellings and purchase of new dwellings are down.

TrendChangeByTypeJan2015Looking across the states, momentum is rising in just two states, NSW and TAS. All other states are slowing.

StateTrendMovementsJan2015Turning to first time buyers, using the revised ABS data (method changed last month) and DFA survey data, we see that whilst first time buyers for owner occupation fell slightly (14.3% to 14.2% of all owner occupied loans), an additional 4,000 loans were written by first time buyers going direct to the investment sector. Much of this is centered on Sydney. As a result the cumulative first time buyer count is rising, with more than 21% of all loans effectively to first time buyers. You can read more analysis on this important trend here.

DFAFTBLoansJan2015This is another reason why no further assistance should be offered to “help” first time buyers into the market. It would be a waste of money.

 

 

GDP Trend Down to 0.4% In December Quarter

The ABS data shows that in trend terms, GDP increased 0.4% in the December quarter 2014. This gives an annual read of 2.3% in trend terms. We need policy changes to get industry to invest and grow. we cannot rely on household expenditure and property speculation to do the job. This gives weight to lower interest rates further, but only if the property sector can be controlled first.

GDPDec2014Gross value added per hour worked in the market sector grew 0.1% and the Terms of trade fell 1.9%. In seasonally adjusted terms, GDP increased by 0.5% in the December quarter, giving an annual rate of 2.5%. The Terms of trade decreased 1.7%, and Real gross domestic income increased 0.2%.

In seasonally adjusted terms, the main contributors to the increase in expenditure on GDP were Net exports (0.7 percentage points) and Final consumption expenditure (0.6 percentage points). The main detractor was Changes in inventories (-0.6 percentage points).

In seasonally adjusted terms, the main contributors to GDP growth were Construction and Health care and social assistance each contributing 0.1 percentage points to the increase in GDP. The main detractor to growth in GDP was Professional, scientific and technical services (-0.1 percentage points).

Capex On The Slide

The ABS data released today shows the continued fall in mining expenditure, and no counterbalancing movement in other sectors. Total new capital expenditure trend estimate was $37,693 m, down 3.9% YOY.

It does not bode well. Business confidence remains low, and given that household debt is still high, we do not expect housing, and households to fill the gap. We are effectively running out of runway as mining investment trails off. So, housing is the only game in town. Given the data now, it is much more likely we will see interest rates lower for longer than previously anticipated. However, the continued reliance on unproductive lending for housing in not a recipe to drive business investment. We need some new thinking on how to stimulate business investment. Our surveys suggest that it is not interest rates which is the problem, so cutting further wont help much. APRA needs to step up here, turn to tap down on housing lending, and make business lending more likely.  The details of the ABS data are summarised below.

  • The trend volume estimate for total new capital expenditure fell 0.8% in the December quarter 2014 while the seasonally adjusted estimate fell 2.2%.
  • The trend volume estimate for buildings and structures fell 1.5% in the December quarter 2014 while the seasonally adjusted estimate fell 2.6%.
  • The trend volume estimate for equipment, plant and machinery rose 0.9% in the December quarter 2014 while the seasonally adjusted estimate fell 1.3%.
  • This issue includes the fifth estimate (Estimate 5) for 2014-15 and the first estimate (Estimate 1) for 2015-16.
  • Estimate 5 for 2014-15 is $152,656m. This is 8.6% lower than Estimate 5 for 2013-14. Estimate 5 is 0.4% higher than Estimate 4 for 2014-15.
  • Estimate 1 for 2015-16 is $109,799m. This is 12.4% lower than Estimate 1 for 2014-15.

 

Funds Under Management Now $2.5 Trillion

ABS released their funds management data to December 2014. The managed funds industry had $2,489.9b funds under management (including some changes to the data capture and revisions), an increase of $57.6b (2%) on the September quarter 2014 figure of $2,432.3b. The main valuation effects that occurred during the December quarter 2014 were:

  • the S&P/ASX 200 increased 2.2%
  •  the price of foreign shares, as represented by the MSCI World Index excluding Australia, increased 0.8%
  • A$ depreciated 6.7% against the US$.

FundsUnderManagementDec2014At 31 December 2014, the consolidated assets of managed funds institutions were $1,958.5b, an increase of $48.8b (3%) on the September quarter 2014 figure of $1,909.7b. The asset types that increased were:

  • overseas assets, $29.6b (8%)
  • shares, $14.6b (3%)
  • short term securities, $8.6b (10%)
  • bonds, etc., $4.3b (4%)
  • derivatives, $0.8b (65%)
  • other non-financial assets, $0.2b (2%).

These were partially offset by decreases in:

  • other financial assets, $3.4b (11%)
  • deposits, $3.2b (1%)
  • land, buildings and equipment, $1.5b (1%)
  • loans and placements, $1.0b (2%)
  • and units in trusts, $0.2b (0%).

FundsAssetsByTypeDec2014At 31 December 2014, there were $503.9b of assets cross invested between managed funds institutions whilst the unconsolidated assets of superannuation (pension) funds increased $54.4b (3%), public offer (retail) unit trusts increased $4.5b (2%), life insurance corporations increased $4.3b (2%), cash management trusts increased $0.8b (3%), and common funds increased $0.2b (2%). Friendly societies were flat.