Yields calmed
After some media conniptions about resurgent inflation over the past fortnight, the crude oil price has tumbled back -12 per cent lower, taking bond yields back down with it.
Panic over, at least for now, with Australia's 3-year bond yield trading with a 3-handle again by late on Friday afternoon.
Tourism has recovered
The ABS released the international trade figures this week, which were largely as expected, albeit with a slight surprise of an increase in exports.
Tourism credits have surged all the way back to above $6 billion per month, seasonally adjusted, which is now a record high (though a part of the increase would relate to higher prices).
For the time being, many Aussies are still travelling overseas, but it doesn't take away from the fact that the Aussie population is booming across all visa classes now.
Developers in strife
There has been some debate about greedy property developers land-banking stock to create a housing shortage and bolster profits (at least, I think that's what people are suggesting), and the Victorian government is even misguidedly introducing a new vacancy tax in an attempt to force more construction activity.
The problem is it takes a moment's research to see that developers are operating on narrow margins, using leverage, in an industry where costs have ballooned.
The reality is that developers and building companies are going bust left, right, and centre, with a couple more going down this week in Victoria and South Australia.
Indeed, the industry share of construction insolvencies are - almost literally - heading off the charts, as summarised in a graph in today's FSR, as released by the Reserve Bank of Australia.
The RBA showed that over a quarter of large builders now have negative cashflows, so there are almost certainly more insolvencies in the post.
As such there isn't much realistic prospect of an increase in the pace of housing supply over the next few years, probably until unit prices have increased by 30 per cent or so.
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Asking rents rose by +3.4 per cent over the past quarter, according to SQM Research.
