QBE Insurance has been forced to withdraw building indemnity insurance from July after a rise in the number of builders becoming insolvent. Legislation in many states requires home builders to hold indemnity insurance to protect the property owner in the event the builder collapses, disappears or the builder passes away. …
Ratings agency Moody’s believes a severe economic shock should see Canadian house prices plunge as much as 44 per cent. The assessment has Canada joining the ranks of Australia, Spain and the United Kingdom in the club of high flyers where a run-a-way housing market has seen housing market fundamentals …
It’s the end of the month again and time for another update from the RBA on private credit aggregates. The trend continues with another all time record low for growth in annual housing credit growth, this time down to just 4.4 per cent. On a monthly basis, there was no …
S&P has reaffirmed Australia’s AAA credit rating for now, but has warned a number of vulnerabilities exist. One vulnerability is a housing correction due to the “substantial [household] debt mainly due to elevated property prices” in Australia. The report indicated “The sustainability of high household debt levels has not been …
A fortnight ago, we heard from the Prime Minister Ms Gillard taking about how “many Australians miss those days when they could spend all of their income, see wealth increase through ever-rising house prices, and through easy credit, borrow against the house again to spend more.” Last Friday, it was …
Influential businessman Dick Smith is one of many who calls Australia’s property market a Ponzi scheme. He told the weekend Australian Financial Review in 2011, “I suggest to people who have big borrowings on a house, it’s all a Ponzi scheme.” A Ponzi scheme provides returns to investors from money …
Growth in housing lending continues to deteriorate, once again hitting record lows. Despite low interest rates, housing credit rose by only 4.5 per cent in the 12 months to December 2012, down from 4.6 per cent in the 12 months to November 2012 and the lowest growth in the 35 …
The Economist Magazine has just released its latest round-up of Global House Price indicators. According to the analysis, Australia’s house prices are 45 per cent overvalued on a price to rent ratio and 23 per cent overvalued on a price to income ratio: This is down from the November 2011 …
It is barely 11 days into the new year and mainstream media is being dominated by more subdued property forecasts this year. Over at Fairfax, Chris Vedelago is writing about the The slump we have to have which according to Chris is definitely overdue after Melbourne’s house prices surged nearly …
Credit Suisse has expressed concerns about the Australian Banking Sector in its latest research report. It fears job cuts, payment shocks and declining house prices could cause downside risks to earnings and dividends as Australia’s households continue to de-leverage. According to the research, leveraged investors are struggling to make money …
Papers published today from the Property Market and Financial Stability conference held in August reveal Reserve Bank Governor Glenn Stevens opened the conference with remarks on if central banks should lean on asset bubbles before they get too big and out of control. Using momentary policy to put downwards pressure …
Treasurer Wayne Swan describes today’s 25 basis point cut to the official cash rate as “the early Christmas present that hard working Aussies deserve.” In a press conference after the Reserve Bank announcement, Swan told Australian’s “We’ve now had the equivalent of seven rate cuts over the past year and …
Only hope remains from the phantom housing recovery after the RBA released credit growth aggregates for October. Growth for housing credit has fallen to a positive 0.3 per cent, down from 0.4 per cent the month earlier. Over the 12 month period, housing credit is growing at just 4.7 per …
Near record low interest rates and talks of a property recovery has done little to instill confidence in a struggling residential construction sector. The Age’s Chris Vedelago today reports: Melbourne’s outer-suburban property market is facing a serious slump as distressed buyers and builders cancel one in every three new home …
The International Monetary Fund (IMF) has highlighted concerns about the concentration and interconnectedness of Australia’s big four banks in the most recent Financial System Stability Assessment on Australia. It reports Australia’s four major banks, The ANZ, Commonwealth, Westpac and NAB hold 80 per cent of the countries banking assets and …
The Australian Securities and Investments Commission (ASIC) has been forced to set up a taskforce to conduct surveillance on spruikers pushing the use of self-managed super funds (SMSF) to leverage up heavily into residential properties located typically in depressed markets such as Queensland. ASIC commissioner Peter Kell is concerned SMSFs …
Last Monday, the Federal Government released its Mid Year Economic and Fiscal Outlook (MYEFO), hoping growth in the residential housing construction sector would take over from our deteriorating mining boom and save Australia from pending recession. Household consumption remains solid in aggregate and there are tentative signs that residential building …
It was once the realm of Real Estate Agents to spruik that it was never a better time to buy, but with the residential construction sector in free fall, state politicians are picking up the pieces and taking over from where agents and bankrupt builders have failed. The South Australian …
After 21 years of economic expansion, Treasury is pinning its hopes on a bigger housing bubble to stave of recession after the mining boom. David Gruen, executive director of Treasury’s macroeconomic group told a Senate budget estimates committee, “In a couple of years, when mining investment does not contribute to …
On Tuesday it was revealed the South Australian Government will need to chop $1.4 billion from the state coffers by 2016 with $240 million coming from the Department of Health and Ageing. Eyes are now on the state government after three independent audits recommend the cutting of 308 staff and …
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