Devils & Details UNPLUGGED

Devils & Details UNPLUGGED

Learn some trivia about me here ahead of next week's event.

There are six day's remaining to snare a ticket.

See you there.

Property crashes! (podcast)

Credit crunch?

More podcast action for you this week.

Tune in here, where we discuss the prospect of a property crash.

More to come next week too!

2wo Third3

Bitcoin dives

Following on from the recent death cross warning signal, Bitcoin is trading down another 14 per cent today.

Today's price is at the lowest level in more than a year.

The world's largest cryptocurrency has lost two-thirds of its value so far this year.

Since the peak in December 2017, Bitcoin has lost more than three-quarters of its value.

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Update: the price is down another $100 since I wrote this.

Update: $150, $200, $300...

Where the demographic tsunami hits

Where the young migrants head

I've posted some research previously to show how Australia's population pyramid is benefiting from a starburst of 25-34 year-olds thanks to the country's immigration programme. 

This is visibly helping to slow the ageing of the Aussie population. 

Intuitively it's always seemed likely that the younger migrant cohort would gravitate to the University precincts and inner suburbs of the capital cities. 

But here's some startling research that shows just how different population pyramids are around the traps, by Demogog Blog's Simone Alexander.

The blog notes:

"As a global city, Sydney attracts a disproportionate share of Australia's migration intake, so when net overseas migration is high it tends to have a positive effect on Sydney's growth rate".

In Camden there are many families with young children, for example, out on the greenfield sites of the urban fringe. 

Meanwhile the south coast has many older inhabitants.

But the inner suburbs of Sydney are experiencing an explosion in the 25-34 year-old cohort, due to the prevailing powerful levels of net overseas migration.  

Despite there being fewer children as a share of the population in the inner city of Sydney, almost half of the population here is aged 20-34, due to the employment, education, and lifestyle opportunities. 

The ABS will release its latest population projections on Thursday this week, which is always useful to recalibrate a few expectations. 

Stay tuned for that. 

Here comes the Cross River Rail

Gentrification

Set to be another handy addition for inner-Brisbane, the Cross River Rail is now under construction.

The surroundings of the photographed Woolloongabba busway will eventually play host to an exciting upgrade by 2024, with the famous cricket ground also set for a major $100 million revamp. 

More details about the Gabba precinct concept can be viewed here. 

Rental vacancies to tighten

Au revoir to the cranes

The most timely JLL report showed that the residential construction pipeline is now shrinking fast on tighter lending criteria for developers and investors.  

In time this will inevitably lead to tighter rental vacancies, especially as we head into and beyond the traditionally busy Christmas and New Year period, with more Airbnb offerings also set to eat into the rental market through this cycle. 

With the greatest volume of apartment construction through this cycle Sydney and Melbourne will be the last markets to know about the tightening (although when D-Day does come the presently record high population growth in these cities means that the tightening of rentals market may also be felt most acutely).

We're already hearing more and more stories of failed or delayed settlements, so the slowing in supply could come about sooner than expected. 

The initial impacts will be felt in Hobart, Canberra, Adelaide, and an array of rental markets around regional Australia.

Indeed, SQM's latest figures showed that rental vacancies had already fallen to the lowest level since 2014 by the end of last month, so the tightening process is well underway in some markets.

The HIA forecast today in its National Outlook that housing starts will fall by more than 50,000 from the peak, noting (or lamenting) that:

'APRA’s restrictions were designed to curb high risk lending practices but we are now seeing ordinary home buyers experience delays and constraints in accessing finance.'

Source: HIA

Note that all of this is before Labor's proposed changes to negative gearing come about, which were originally designed to slow investor activity in the raging hot markets of 2016. 

Arrivals hit record high

The ABS released its arrivals and departures figures for the month of September 2018 this morning, which showed permanent and long-term arrivals rising to 823,090 over the year to September. 

This represents an increase of 6 per cent from a year earlier, and is the highest figure on record for Australia (the equivalent figure around the time of the Sydney Olympics was about 300,000, which is a measure of just how popular migration to Australia has become).

Short-term arrivals into Australia have also boomed in recent years, rising to a record high of 9.2 million in September. 

Interestingly the growth is no longer being driven by Chinese tourists, with a range of other countries picking up the mantle, including India.

Education arrivals were also up by 5 per cent from a year earlier to a record high of 596,400.

Simon Kuestenmacher of The Demographics Group refers to the international student cohort as a demographic jackpot - they pay for their education, and 1 in 6 stays in Australia as a skilled migrant going on to pay tax immediately from a young age.

Finally, at the state level short-term arrivals were up by 4 per cent in New South Wales to 3.45 million for the year to September, but growth was stronger in Victoria (up 8 per cent to 2.3 million) and Queensland (up 8 per cent to 2 million).

Queensland was a little flattered here by the Commonwealth Games XXI, held at Gold Coast earlier this year...although that all seems like a long time ago now!

The wrap

Both short- and long-term arrivals hit record highs for the year to September 2018, with accordingly significant implications for housing market demand over the years ahead.

Australia's visa programme is tilted towards those aged under 30, so there are dramatic implications for rental market demand here as construction slows, as well as pent up demand for entrants to home ownership over the years ahead. 

A bit on mortgage stress (podcast)

Podcast

A Sunday podcast for the weekend, where we discuss mortgage stress and property market meltdowns, among other things. 

Tune in here (or click the image below). 

There's always a crisis just around the corner.

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This week I'll be down in Melbourne, where I'll also be back on the Property Couch with the fellas down there. 

And then the following week I'll be in Sydney to appear live on the all-new Your Money TV show, as well as to appear at the Devils and Detail Live and Unplugged event at The Ivy.

Check out the line-up of speakers...wow.

You can get your ticket for only $50 here. 

Negative gearing loophole

Swiss cheesed

The AFR's lead article today highlights the somewhat glaring loophole in Labor's negative gearing plans.

I highlighted the same point on this blog here a week ago.

Changes to property taxation are evidently going to be a red hot topic over the next six months.

I put together a short presentation here to explain some likely outcomes. 

Prepare accordingly!