Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional), 5 x finance author.

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Tuesday, 25 September 2018

Budget balance comes screaming back

Surplus in sight

So much for the risk of a downgrade, the Budget has come screaming back to a deficit of only $10.1 billion or 0.6 per cent of GDP in 2017-18, with the risk rating actually upgraded to AAA neutral last week. 

With nominal GDP growing by 4.7 per cent the result was miles ahead of expectations, even those of only four months earlier, let alone the $29 billion deficit projected at the time of the May 2017 Budget.

There was a huge increase in revenues over 2017-18, with jobs growth and compensation of employees shooting the lights out (although wages growth has remained low), as well as a big surge in company tax.

Company profits are at record highs - as I looked at previously here - and some high-profile operators are now in a tax-paying position again, having used up years of carried forward losses.

Meanwhile payments were also well down over the year.

Cherelle Murply of ANZ dropped the latest numbers into the chart below.

The deficit is the smallest in a decade, having continued to decline from 4.2 per cent of GDP in 2009-10 when the economy was in need of serious stimulus.

Net debt will also peak lower than expected.

As you can see the budget could potentially be back into surplus in no time at all. 

Source: ANZ

With an election looming by the middle of next year it's more likely that the Coalition will loosen the purse strings a little in an attempt to turn around some very ordinary-looking polls.

More signs of an improving economy.

2 months to lift-off

Legit, from Domain.

QLD 4005, such a great postcode.

Monday, 24 September 2018

Stark turnaround for Queensland

Sun to shine on Queensland

From Westpac (click to expand).

Source: Westpac

Indeed so.

Nice to see.

Bottom falls out of the Top End

Natural selection

Years ago I lived up in Darwin.

It's a cool place - at least figuratively, if not literally - and certainly very different from the sometimes drab sameness of suburban life in the big smoke.

One of the things I liked about it was how almost everyone turns out when there's an event in town, such the V8 Supercars and INXS playing live (or whatever). 

Mindil Beach Sunset Markets quite rightly attract a buzzing crowd every weekend too.

Meanwhile, the National Parks of Kakadu and Litchfield are a must-see-to-believe, especially in the Big Wet (although most Aussies talk of there being two seasons - wet and dry - Kakadu's traditional owners recognise six different seasons, understanding the subtle transitions between them). 

The odd earthquake aside, Darwin has the best winter climate of any city I've experienced, perfect dry heat in the low 30s all day every day, and never a cloud to be seen.

The summer weather, on the other hand, can range from harsh humidity to downright brutal and Cyclonic. 

Although I love the place, I think it would be fair to say that a lack of diversity of choice is a net negative for the Top End, including within the labour force. 

There were stacks of jobs in resources and in the public sector during my time up north, but not very much else. 

Employment rates and full-time salaries are high, and official unemployment rates remain very low.

But the mining boom years have faded and people are steadily drifting back where they came from.

Actually, not that steadily now...quite quickly!

I also recall simple things like going for a takeaway or a coffee being phenomenally expensive, although for all I know maybe that's changed as the mining sector has cooled. 

From boom to bust

From 2003 dwelling prices soared relentlessly in Darwin for a decade, rising by more than 180 per cent by the middle of 2014, by far the biggest increase of any of Australia's 8 capital cities over that period. 

Since the peak of the resources construction boom time prices have dropped back by 18 per cent, including by 6 per cent over the 2018 financial year alone. 

During the boom years thousands of Aussies were relocating from interstate up to the Top End lured by the high wages on offer.

But although the sector experienced a second wind post-financial crisis as China stimulated its economy, even the mighty $54 billion (hello overruns!) Inpex/Ichthys LNG project hasn't been enough to stem to the inevitable downturn.

And now the NT is losing residents interstate in droves, with more than 3,500 upping sticks on a net basis over the year to March 2018. 

With life expectancy increasing, you typically see more births than deaths these days, so the population of Australia increases naturally even without its prevailing strong immigration programme.  

But in the NT the outflow of residents interstate is overwhelming both net overseas migration and the natural increase, to the extent that the population of the territory has actually declined by 1,000 persons over the past six months to 246,700. 

There are few weaker dynamics for a housing market than an outright decline in the population, if sustained. 

No doubt the local authorities will be putting in place incentives to entice families to move up north. 

In short, arguably no state or territory presently has a more concerning range of metrics in its economy or housing market. 

In arrears

Last week I looked at how each of the most populous states is faring with regards to 30+ day mortgage arrears.

In short, not great in Western Australia, pretty comfortable elsewhere. 

Let's now consider the other four states and territories.

As you might expect the NT had the highest rate of prime and non-conforming 30+ day arrears at 2.67 per cent as at July 2018, although this had declined just a little over the preceding two months of available figures from 2.82 per cent. 

Elsewhere arrears rates were reasonably low in South Australia at 1.50 per cent following a marked improvement, very low in thriving Tasmania at 1.31 per cent, and extremely low in the Australian Capital Territory at 0.74 per cent. 

Generally mortgage arrears are a little higher than a year earlier across the board, despite falling unemployment rates, in part due to interest-only mortgages being reset.

Hopefully the NT can turn itself around soon!

Saturday, 22 September 2018

Armageddon looming for Australia?

Revenues boom

Some folks are trying ever-so-hard to convince everyone that Australia is heading for an economic collapse.

Nothing new there, of course, but unfortunately for the gloomers nobody seems to have told the economy itself, which saw growth accelerate to a 6-year high of 3.4 per cent in FY2018.

Meanwhile the resources boom is now paying serious dividends with annual exports booming to a record high of $406 billion. 

And despite the disruptive Tropical Cyclone Joyce having lurked over the Pilbara - leading to the blip over the back end of 2017 - we've racked up a cumulative international trade surplus of some A$25 billion over the past 21 months. More records. 

In fact, there's plenty more where this came from with LNG export values breaking record highs by the month, tourism and education exports firing, and the iron ore price touching a 6-month high this week (now hovering around a very lucrative A$95/tonne).

Oh, and there's a coal price boom as well. 

Back towards full employment

From a Federal Budget perspective it's important to see people in work, and the good news is that employment surged by +306,400 or 2½ per cent over the year to August 2018. 

Over the past two years the economy has added a stunning +642,200 jobs for growth of 5.4 per cent!

With that rate of employment growth it can be no surprise to see that the trend unemployment rate has dropped to the lowest level since 2012. 

The unemployment rate has fallen to 4.7 per cent in New South Wales and 4.8 per cent in Victoria, the territories are already at or below 4 per cent, while Tasmania and South Australia are now improving rapidly.

More employed and fewer unemployed. 

An embarrassment of revenues

All of this is leading to a veritable flood of government revenues that could theoretically have the budget back into a rolling annual surplus in no time at the present rate of progress. 

So fast has the improvement been, of course, that this leaves the Coalition set to open its chequebook in the lead-up to the 2019 election.

With the government's interest expense burden so low at just 4 per cent of revenues there's significant upside potential for infrastructure spending over the next year, while realistically there are likely to be some tax cut sweeteners heading the way of the electorate. 

As for the risk of a rating downgrade so eagerly and widely reported over the past two years, this was swept away by S&P affirming Australia's AAA rating today, while upgrading the budget outlook to stable. 

AAA rating

Anyway, I'm a Coalition stooge, so I'll leave it with S&P Global to fill in the blanks:

S&P Global Ratings revised its outlook on the long-term ratings on the Commonwealth of Australia to stable from negative. We also affirmed the ‘AAA’ long-term and ‘A-1+’ short-term unsolicited sovereign credit ratings on Australia.


The stable outlook reflects our expectations that the general government fiscal balance will return to surplus by the early 2020s.

We expect steady government revenue growth supported by the strong labour market and relatively robust commodity prices, to be accompanied by expenditure restraint.

We also expect property prices to continue their orderly unwind, and that this slowdown won’t weigh heavily on consumer spending and the financial system’s asset quality.'

And furthermore:

'Australia is a wealthy, diversified, and resilient economy, with GDP per capita of an estimated US$56,500 in fiscal 2019.

Along with the resilient and high-income Australian economy, this reflects the low risk appetites of the major banks, which dominate the industry, supported by conservative and proactive regulatory and governance frameworks.

We consider Australia’s banking system to be one of the strongest globally.'


Friday, 21 September 2018

Weekend reads - must see articles of the week

The key articles of the week are summarised for you here at Property Update.

There's some good stuff worth reading here this week, on what's changed in the housing market.

You can subscribe for the free newsletter here.

Have a smashing weekend all!

All in the timing

Pascoe on negative gearing reform (click to read at the New Daily).

Where is the Aussie population growing?

Population growth

We've already looked in a bit of detail at the latest Aussie demographic statistics, which showed a bit of a slowdown in net overseas migration, and a meaningful ongoing swing in internal migration away from New South Wales and towards south-east Queensland.

Where, then, is the Aussie population growing and set to grow most?

Let's take a look back at the 2016-17 figures, and try to project forward from there by dusting off the crystal ball and looking at the latest jobs growth figures. 

Greater Melbourne increased its population hugely by +129,400 or +2.7 per cent in 2016-17.

This is supremely strong headcount growth, both cause and effect of an expanding construction boom on an unprecedented scale for Victoria.

The monthly unemployment rate for Greater Melbourne dropped to just 4.9 per cent in August, down from well above 6 per cent back in 2014 as the economy floundered.

This recent marked improvement hasn't yet flowed through to Melbourne's annual average unemployment rate, but make no mistake full employment is edging closer in Victoria.

Greater Sydney wasn't too far behind in increasing its population by +107,400 or +2.1 per cent in 2016-17, taking the harbour city's total population to around 5¼ million at the time of writing.

The jobs bonanza for Greater Sydney continued in August 2018, with year-on-year growth in total employment of +89,100, and this week's skilled vacancies figures from the Department of Employment pointing to further hiring and brighter things ahead. 

The Greater Sydney unemployment rate was considerably lower than that of Melbourne at just 4¼ per cent in August, and it continues to trend lower. 

When will wages start to rise? Will wages start to rise? Key questions!

Despite strong population growth the Aussie economy is steadily making inroads into the total number of unemployed persons - mainly thanks to the two big capital cities - which puts the unemployment rate at the lowest level since 2012.

Brisbane/SEQ the 3rd growth hub

Greater Brisbane is looking to rediscover the resources boom vibe and its population increased by +2.2 per cent or +50,800 persons to 2.41 million in 2016-17.

Thereafter followed a huge drop, with Adelaide and Perth reporting population growth rates of under 1 per cent, according to Australian Bureau of Statistics (ABS) figures.

You can pick out your own favourites in the ABS table below. 

Source: Australian Bureau of Statistics

In percentage terms there was considerably quicker population growth in other parts of south-east Queensland, at both Gold Coast (+2.6 per cent) and the Sunshine Coast (+2.6 per cent).

And, finally, Geelong in Victoria (+2.7 per cent) has been riding on Melbourne's coattails with abandon.

These remain three of the regional cities that have thrived lately.

Looking forward...

With Sydney and now Melbourne recording respective unemployment rates of under 5 per cent, it seems likely that these two capital cities will continue to attract the great bulk of net overseas migration, at least for the foreseeable future.

The figures released this week suggested that Sydney will, however, lose many incumbent residents to Greater Brisbane and south-east Queensland.

In terms of absolute population growth nowhere else really features materially at all outside the three main hubs.

But in percentage terms I'd hang my hat on Queensland's coastal cities, Geelong, Canberra, and possibly Hobart.

Thursday, 20 September 2018

Brisbane looks to rediscover that mining boom vibe

Sunnyside up

Queensland is gradually looking to rediscover that resources boom vibe.

Brisbane-based economist Nick Behrens of the QEAS explains how population is now flowing towards employment opportunities at levels not seen in the years since the resources downturn. 

And, following a lean few year post-mining boom, things are clearly on the up again.

Let's take a look in two parts. 

1 - Around the traps

As promised the Coalition has wound back immigration a little, although in historic terms net overseas migration remained high over the year to March 2018 at +236,800.

The three most populous states mopped up well over 85 per cent of that total, an unusual-looking blip for Queensland in the December 2017 quarter notwithstanding (click the charts to expand). 

Internally, movements are all about Queensland now, with net interstate migration exceeding +24,000 and rising to the highest levels in well over a decade. 

Births continued to exceed deaths by a total of +143,900 over the year to March.

Adding in the natural increase of the population, therefore, we can see that New South Wales (+113,100), Victoria (+137,400), and Queensland (+83,300) are now the three main population growth hubs.

Interestingly, the growth in the estimated resident population of both Victoria and New South Wales last year was considerably higher even than previously thought, to the extent that I've had to recalibrate the chart scale to accommodate Victoria's gold-rush-like population boom. 

2 - Queensland in focus

Queensland recorded net overseas migration in the December 2017 quarter of just +1,489, but this rebounded to +11,642 in the March quarter - there's seasonality, of course, but this looks unusually volatile.

No matter, plotted below are the components of estimated annual resident population growth in the Sunshine State over the past two decades. 

As new inner city apartment starts slow to a crawl this means that some parts of Brisbane and south-east Queensland are now moving towards an undersupply of dwellings again, following several years of flat out construction rates. 

The smoother rolling annual figures show this more clearly. 

For a detailed breakdown of where people are moving to and why I recommend taking a read of Nick Behrens' work here.

The news is upbeat for Brisbane, recording its quickest population growth since 2012/13, a growth rate of 2 per cent making it once again one of Australia's fastest growing cities. 

Jobs challenge

The skilled vacancies data released by the Department of Employment yesterday confirmed two things.

First, just how poorly Brisbane has fared from a jobs creation perspective compared to the rest of the state since 2010, as denoted by the index reading of well below 100.

And secondly, that things are in positive territory again now for the state capital, with vacancies rising by 3 per cent over the year to August 2018 to 20,400.

Source: Department of Employment

With a number of infrastructure projects pending and underway, Brisbane should be able to ramp up employment growth over the years ahead. 

Roma Street Parkland, Source: Visit Brisbane

Is mortgage stress really at record highs?

Moderate mortgage stress

Has a 'perfect storm' pushed mortgage stress to 'epidemic' levels, and, indeed, 'record highs'?

OK, breathe.

Let's take a look. 

Fortunately this one is an easy question to answer, because there's a very simple de facto measure of mortgage stress, being late payments - or mortgage balances 30+ days in arrears.

30+ day prime arrears rates have been flat for the past three months at just 1.38 per cent.

So there's not been too much struggling going on, in reality. 

The prime arrears rate is up a bit from 1.17 per cent a year earlier, so there's been something of a recent increase, partly relating to interest-only borrowers being switched across to principal repayments (you can click on the charts to expand them).

Although there's various tosh written about subprime lending in Australia, low-doc loans have by and large gone the way of the dodo, and non-conforming mortgage arrears have been falling for about a decade now. 

So the answer to the question of whether we're experiencing record high mortgage stress is clear.

Obviously not.

Sound practices

This is positive news, reflecting a reasonably healthy economy and steadily improved lending standards over time, although of course the constant cry for the infantilisation of borrowers continues unabated.

The latest ruling from ASIC relates to credit card limits, and becomes legally effective from 1 January 2019.

If I'm reading the media release correctly, this effectively introduces a deemed P&I payment when calculating mortgage serviceability for borrowers with credit cards, to ensure they can pay off the credit card limit within three years.

I really can't see the point of this; some people clearly have way too much time on their hands.

Whatever next? Fingerprint samples, biometric testing, and CCTV surveillance? 

Around the traps

Back to the mortgage figures and a 30+ day mortgage arrears rate of under 1½ per cent, then - where exactly are the borrowers in arrears?

Summarily, mainly in Western Australia, the Northern Territory, and regional Queensland, this largely relating to the resources downturn since 2013.

In short, we've had half a decade of recession-like conditions in Western Australia, but elsewhere arrears remain very low, and in any case the outlook is now brightening significantly in WA and for the resources sector. 

If I could be bothered to copy across the chart for the other states and territories you'd note similar trends, with very benign arrears in three jurisdictions but the Northern Territory in a bit of a quagmire with a 30+ day arrears rate of 2.67 per cent. 

IO cliff

What's all the fuss about then, given that the unemployment rate has dropped to the lowest level since 2012 and is continuing to decline?

It's tempting to say 'beats me'.

But there is, in my opinion, one area of concern, and that relates to interest-only (IO) borrowers being booted across to principal repayments.

Most borrowers will manage this transition just fine, of course.

But some have become a bit too comfortable with paying only the interest - it being human nature to adjust financial habits to prevailing circumstances - and will get into trouble if the hard line on IO loans persists.

Remember, even in a genuine financial crisis most borrowers will keep making their repayments quite comfortably, but the unravelling is driven by what happens at the margin.

A matter of opinion

In my opinion there's little point in punishing potentially stressed borrowers by sending them to the wall.

If financial stability and fewer IO loans is the goal, restrict the flow to new borrowers.

The good news is the reduced flow of new IO loans has already pushed the share of IO loans outstanding to multi-decade lows, so much of the heavy lifting has already been done.

Outside recessions investors have generally tended to have lower arrears rates than homeowners.

However, from what I observe and am hearing anecdotally this may be about to change unless existing IO borrowers that need the breathing space are cut some slack.

The figures clearly confirm there are no major issues with mortgage arrears up to July 2018. 

So my question is: why create a new problem where there isn't an existing one?

Especially when the flow of new IO loans is now tracking at just ~15 per cent of new lending.

Wednesday, 19 September 2018

UK house price update

UK house prices up 3.1 per cent

With London's average price up for a fourth consecutive month, the UK average house price increased by 3.1 per cent to £231,000 over the year to July 2018. 

London's housing market has faced down some headwinds, including stamp duty changes, a fall in EU migration, and the threat of Brexit. 

The UK average house price in July 2018 was £6,000 higher than in July 2017 and £2,000 higher than in the preceding month, reported the ONS:

Source: ONS

In England prices are comfortably at record highs with an average price of £249,000, but in the other countries, in real terms the recovery over the past decade has been comparatively very modest. 

The inflation rate surprised in jumping to a 6-month high of 2.7 per cent this month. 

Jobs ads on the rise again

Job ads just off 6-year highs

Trend skilled job advertisements increased 0.6 per cent in August 2018 to 183,100, to be 4.5 per cent higher than a year earlier.

The index has been through a bit of a blip this year, but there was a second consecutive gain reported this month.

The index is 31 per cent above the October 2013 nadir, or 43,300 ads higher, and at a level consistent with an ongoing improvement in the labour force. 

The index thus sits just below the 6-year highs seen earlier in 2018. 

Sydney has been through a tremendous jobs boom, yet job ads still remain a couple of per cent higher year-on-year.

Some 57,900 of the skilled vacancies are located in Sydney, meaning more gains ahead for the harbour city.

In fact, a combined 57 per cent of vacancies were in Sydney and Melbourne alone:

Brisbane saw a 3 per cent increase over the year to August, up to 20,400 vacancies, but the index shows that this remains about 10 per cent lower than the headier mining boom days of 2010. 

Vacancies were up very strongly year-on-year in Tasmania (+17.7 per cent) and Western Australia (+13.4 per cent), but continue to fall in the Northern Territory to the detriment of Darwin. 

Tuesday, 18 September 2018

Aussie housing prices roll over in FY2018 (Chartfest)

Aussie housing rollover

Aussie dwelling prices declined by 0.6 per cent over the year to June 2018 as the market grappled with tighter lending standards, together with a sweeping range of measures implemented to cool activity (from foreign buyer duties, to restrictions on investment and interest-only loans, reduced self-managed super fund lending for residential property, changes to deductibility of expenses, and more). 

Today I'll run through how some of the various capital city markets have been faring and why in half a dozen charts.

Stock value down

First up, the total value of dwelling stock was $6.93 trillion at the end of the 2018 financial year, only slightly up from $6.82 trillion a year earlier (click the charts to expand).

Between June 2017 and June 2018 the 8 capital city weighted average resi price index was down by 0.6 per cent. 

The 60 Minutes program garnered a lot of attention this week with its now-traditional 'looming housing crisis' exposé, the segment somewhat unjustly taking each analyst in turn and clipping out everything but their doom case scenarios (at least three of the main contributors have since protested that in part their views were misrepresented...I'm shocked, lol).

Admittedly I haven't watched it.

As you might expect our old mucker Martin North of Digital Finance Analytics snared the headlines as his worst case scenario was a worse worst case than the other worst case scenarios, cautioning of a possible price crash of 40 per cent (for some reason the figure always seems to be 40 per cent in Australia, a bit like the golden ratio in nature, but for house prices).

It's tempting to be dismissive of a dyed-in-the-wool pessimist such as Northy who's been warning of a gush of mortgage stress and defaults since at least 2009 that I can remember, when he warned potential borrowers that they would be 'shocked and surprised' when the official cash rate reverted to 5 per cent.

Would-be homebuyers were indeed shocked and surprised, but mainly because the Sydney house price index went on to increase by 100 per cent rather than due to mortgage stress.

Forecasting errors aside, the truth is that this slowdown has been engineered amidst a unique combination of circumstances, so nobody really knows what happens next. So let's see.

Sydney rolls over

The main driver of the declines over FY2018 was the most populous capital city of Sydney, where detached house prices were off by 4 per cent, with the attached dwelling price index down by 3 per cent. 

It's interesting to note that on average apartment prices have held up better than house prices in Sydney, reflective of the reduced borrowing capacity for many investors, although truthfully the picture varies quite significantly across the city, and some areas are faring much worse than others. 

The best definition of a housing boom that I've heard is 'when even the crap sells' - thanks kindly to Phil on Twitter - but that phase of the Sydney market cycle has long since passed. 

Some A-grade properties are still commanding strong interest and prices in Sydney, but the inferior stock is struggling, while some sub-regions are contending with all the new supply resulting in a glut of listings on the market. 

It's also interesting to note how the movement of an index can differ from the lived experience for housing market participants, as I discussed on the Business Insider Devils and Details podcast here.

I can recall going to Sydney auctions in Q1 2017 where the amount of money being thrown around between competing bidders suddenly went completely deranged, yet within a matter of a few short weeks all that froth was wiped away by further APRA measures announced at the end of the first quarter. 

The lived or 'on the ground' experienced for me, then, was that transaction prices had fallen by up to 10 per cent all but overnight, but of course an index incorporates a far broader range of transactions that my tiny cross-section of the market. 

Around the traps

Some of the other markets recorded dwelling price growth, including Brisbane which reported a 0.7 per cent increase in the June quarter, while Hobart - a relatively small capital city for the purposes of the weighted average calculation - notched a thumping 15.5 per cent year-on-year increase.

Australia's other major capital city of Melbourne saw prices tick down by 0.8 per cent in Q2, although prices were still up by 2.3 per cent in the year to the June 2018 quarter. 

The two main resources capitals have already been in a multi-year decline but may now be levelling out, with Perth prices down by less than 1 per cent from a year earlier (although, up in the Top End, Darwin is still in decline, with prices down by more than 6 per cent). 

The estimated mean price of dwellings in Australia was a little lower at $686,200, down from $688,200 a year earlier. 

At the state level the mean price in New South Wales is steadily trending down, with Western Australia now well off the lows seen last year as the resources sector rebounds. 

We shouldn't read too much into the total number of dwellings as at June 2018, being a preliminary estimate only of 10,093,700.

In saying that there's some evidence to suggest that Greater Sydney has not overbuilt housing versus underlying demand to anything like the extent that people seem to think through this cycle. 

There are still many apartment projects under construction in Sydney, of course. 

However, a 5-year increase in the number of New South Wales dwellings of about 227,000 or ~7.9 per cent looks to be on the low side relative to underlying demand (the reliability or otherwise of preliminary estimates notwithstanding), with the state's estimated resident population having grown by more than 115,000 per annum of late. 

The wrap

A mixed picture overall, but with Sydney now clearly well into its downswing, and Melbourne recording a much weaker result in Q2.

The capital city with the best medium-term prospects appears to be Brisbane, while Perth homeowners will be hopeful that the worst has now passed.

So, that's it, with Sydney house prices down by 4 per cent, albeit still precisely 30 per cent higher than when the 'apocalypse now' stuff began in earnest in 2015.

Canberra vacancy rate falls again

Canberra tightens again

You expect a bit of chirp if you write about real estate.

Nobody can disagree that the financialisation of shelter is lamentable, and sometimes it's crazy how housing prices and auction clearance rates are reported like footie results.

However, this is only going to get worse.

It's inevitable because long-term migration to Australia is at a record high, yet the government supplies almost no new dwelling stock for the new renters. 

And if the prospective returns are poor, landlords won't invest - it's that simple. 

A policy decision was taken years ago that landlords would have to supply the rental stock, although there was a temporary flicker of activity during the financial crisis Rudd stimulus when the government actually built some public housing. 

A bit of chirp is one thing but strangely nothing generates more vitriol than discussion about land tax.

My view has occasionally been that excessively high land tax in the ACT will lead incumbent investors to sell, while new property investors will look elsewhere (they could literally hop over the border into 'Quangers' - and in fact this is happening, with investor loan finance in Canberra imploding). 

The counter-argument is that properties don't go anywhere and someone has to buy them - which is true, but of course it's the net flow of rentals versus renters that matters. 

Whatever, I'll just report the numbers.

After all, it could take a full cycle for the full impacts to be revealed - for example, higher rents could see investors return, and so on. 

SQM Research reported that Canberra's vacancy rate fell again to just 0.7 per cent in August, continuing a sweeping 3-year downtrend from 2.4 per cent in August 2015. 

On a 6mMA basis Brisbane has continued to trend down throughout every month of calendar year 2018 to date and internal migrants head north. 

Sydney's vacancy rate was still at 2.8 per cent in August, well up from a year earlier as the new supply comes online and needs to be abosrbed, while Melbourne was much tighter at 1.6 per cent. 

Very tight in Hobart, and increasingly Adelaide, while Perth is coming down from the stratosphere.

Nationally the vacancy rate was down from 2.2 per cent a year earlier to 2.1 per cent.