Australia is flattening the curve...now what?

New cases lowest in weeks

By 6.45pm today there were just 96 new confirmed cases of COVID-19 in Australia, representing another decent drop from 119 yesterday. 

Tasmania's figures aren't yet in, so the final count could yet nudge above 100.

Still, this could be the lowest figure in 22 days, which is fared better than anyone could have dared to hope at the end of March. 

The government will hold the line over the long Easter weekend, strongly encouraging people to stay at home and continue to flatten the curve. 

Some states and territories are now seeing such low results that at some point a 'soft reopening' of their local economies may soon be countenanced (albeit with the borders seemingly likely to remain closed).

Australia has now seen 50 deaths from COVID-19, largely amongst the elderly, while ICU cases fell from 93 to 86. 

It's clearly an important long weekend ahead, but it's been heartening to see further progress.

Housing loans declined (a bit) in February

Solid lending in February

Housing conditions were strong up until the end of February, the last of the pre-Coronavirus data series showed. 

Total housing lending was fairly steady at $19.5 billion, representing an increase of +13.1 per cent from a year earlier, mainly driven by homebuyers. 

First homebuyer commitments rose to the highest level since 2009.

At the state level, homebuyer loans (ex-refi) in Queensland and Western Australia were strong, while New South Wales and Victoria saw a partial retracement, although volumes in these states remained +15 per cent and +20 per cent higher than a year earlier respectively.

For home buyers purchasing existing dwellings the average loan size was steady at a near-record high.

There was some variation around the states, partly impacted by refinancing activity.

The wrap

Overall, lending volumes were considerably stronger than a year earlier up until February 2020, but transaction activity is now expected to drop sharply through March and April as movements are restricted. 

Tourism cliff

Tourism dries up

Australia's trade balance is now falling away.

In fact, it was already tailing away by the end of February.

Coal exports were dropping away in the early months of 2020.

And commodity export values had rolled over.

Worryingly, even in February services credits were hammered, as tourism began to dry up.

The Reserve Bank didn't sugar-coat anything in its Minutes today, predicting a sharp contraction in growth and a substantial rise in unemployment.

The RBA noted that financial markets have been operating somewhat more effectively, partly thanks to central bank measures around the world, with a starburst of co-ordinated fiscal and monetary stimulus coming down the pipe. 

Borrowing costs for some new borrowers are declining, but note that these trends impact borrowers on a case by case basis, and in some respects lending standards and assessments have been tightening and becoming more conservative. 

UK housing market on pause

Halifax expects resilience

Halifax reported that UK house prices held at record highs in March, noting:

'On a practical level market activity has been paused'.

A big drop in the number of transactions is now inevitable.

The average house price was +3 per cent from a year earlier at £240,384.

So few transactions are expected to take place in April and May that average prices may not be available for calculation, noted the Halifax release, while Halifax also reported confidence in the fundamental strength of the market (no surprises there).

New listings in decline

Listings and sales slowing

New listings fell in March according to SQM Research as more potential vendors decided not to list.

However, total listings had already begun to increase (+3.7 per cent) as more 30-60 day stock banked up, having failed to sell. 

From a year ago total property listings remained -13 per cent lower than year earlier, mainly due to Sydney where listings were still -23 per cent below March 2019 levels, with Hobart also down -19 per cent year-on-year. 

SQM reported that asking prices increased further in March, driven by increases in Sydney, Melbourne, and Perth,  suggesting that vendors have not yet adjusted their price expectations, despite the effective shutdown of the economy.

A great time to revisit of 4Fs model

The 4Fs 

More downtime this week, or working from home?

It's a great time to revisit our 4Fs model!

See here for more, or click on the image below:

On top Down Under

COVID-19 update

Scott Morrison has roared ahead in the polls to be the preferred PM over Albo by 53 points to 29, while his approval rating has fairly rocketed higher from 41 to 61.

The figures for the Coronavirus have - against all expectations - been better over the past week than anyone could have dared hope. 

As Australia went beyond 300,000 tests, new confirmed cases fell today again to just 104.

This is now the lowest figure we've seen reported in 20 days...or nearly 3 weeks.

New South Wales had 57 cases today, for an increase of 2 per cent.

Victoria had just a couple of dozen new cases confirmed, and everywhere else was lower again.

And here's the chart by state.

With the Northern Territory recording only one case, and certain states and territories reporting zero cases on some days, it's a matter of time before more and more questions are asked about opening parts of the economy for business before the plan to 'hibernate' businesses risks putting too many of them into a coma.

Realistically it's likely to be staged process, and possibly one with several false starts, but long may these vastly improved figures continue.

Europe also appears to be seeing a peak in new cases, sending waves of optimism around global markets today. 

Property cliff (ausbiztv)

Talking property on ausbiztv

I discussed the logistics of buying and selling property in the current environment with Nadine Blayney and Ingrid Willinge at ausbiztv here.

You can click on the image below to watch the segment (you'll need to sign up for free to watch).