Victoria's everything boom

Victoria construction surges

Brisbane's once-rampant apartment construction has now righted itself, and indeed median unit prices were up a fraction over the past year in the Queensland capital. 

Victoria's apartment construction on the other hand has exploded to a record high (as expected from leading indicators), with the value of work done an astronomical 416 per cent higher than a decade earlier in chain volume measures terms. 

Sydney doesn't build so many houses, so a lot of activity is expected, but for Melbourne this is a boom-and-a-half!

Or in a picture...AWOOGA!

It's an everything boom for Victorian construction, as flagged here previously, with public and engineering works also going on a tear. 

Queensland engineering construction is also finally on the rise again after the state's multi-year downturn. 

Adding in detached housing construction, Victoria's construction super-boom over 16 consecutive quarters and counting helped to increase total work done nationally in the second quarter by 1.6 per cent in seasonally adjusted terms. 

Eight consecutive quarterly increases in South Australia have also helped to offset the resources and housing construction weakness in Western Australia.

Construction work in New South Wales is set to top out now as apartment starts decline. 

Job ads stalling

In other news skilled job vacancies were up by 4.7 per cent from a year earlier to be 30.5 per cent above the October 2013 nadir in July 2018, according to the latest Department of Employment figures. 

The seasonally adjusted monthly result was up just a notch following three consecutive declines. 

Unsurprisingly Victoria scored well here too, with falling unemployment looking like a shoo-in for Melbourne. 

In Western Australia vacancies were up 16.3 per cent over the past year, pointing to brighter days ahead across the Nullarbor.

Nationally, though, the growth in job ads seems to have stalled, with an election to follow - and that rarely inspires confidence in employers.

On thwarting the Peter Principle

Here's how!

Kiwis migrating to Oz again

Choice

After a 3-year hiatus, it seems that more Kiwis are heading to West Island again (as opposed to the other way around). 

Australia is winning in the permanent and long term migration Bledisloe Cup, at least.

It's interesting to note that the unemployment rate has been lower in New Zealand than in Australia for quite some time.

And there were some one-off factors, such as the post-earthquake Christchurch rebuild. 

But maybe the tide is turning just a little now back in favour of Australia. 

Special visa class for rugby players, anyone?

Now renting

Starting to see just a bit more of this in Brisbane now.

Source: Harcourts

The coming infrastructure boost will help.

Wheels coming off out west

One wheel off/axle broken

Sharper dwelling value falls now happening in a Western Sydney near you.

Chart art brought you via Cameron Kusher of CoreLogic.

Source: CoreLogic

Follow @cmkusher for top draw analysis.

I discussed the risks of Blacktown, Parramatta, the Hills District, and some Western Sydney suburbs in a bit more detail in this February 2017 podcast special with Business Insider. 

Prices are now down by more than 10 per cent in the Hills District SA4.

Median prices are also down by 8 per cent in Blacktown, and 7 per cent in Parramatta. 

More to follow...

More bums on seats in FY2018

Australia is very popular

Permanent and long term arrivals increased 4½ per cent in FY2018 to 808,480, up from 773,400 a year earlier.

That's a record high.

Tourism boom now slowing

2018 was also a record financial year for tourism and short-term visitors.

There was another solid 5.6 per cent in visitors to New South Wales, to 3.44 million.

Queensland also saw an apparently strong 6.2 per cent increase to 1.97 million.

Being up at Noosa today - and sharing luncheon with Queensland-born Mr. Michael Pascoe, no less - I'm duty bound to say that this is because the Sunshine State is beautiful one day and perfect the next.

In truth, though, this should be seen as a somewhat disappointing result for Queensland given that Gold Coast played host to Commonwealth Games XXI in 2018.

Report card: could do better. 

Wall of China

There's been some debate as to whether the multi-decade boom in Chinese visitors to Australia is slowing or not. 

It's impossible to say from looking at month to month numbers - there have been apparent slowdowns many times before over the years - but there was a 12 per cent increase over the financial year, from 1.28 million to 1.44 million. 

Indian visitors increased by a much faster 20 per cent over the financial year, albeit from a much lower base. 

Viewed in that context, it's less surprising that over the financial year by far the greatest percentage annual increases in visitors were seen in Tasmania (36 per cent) and the Australian Capital Territory (27 per cent). 

Tasmania was ahead of the curve in recognising the Asian Century opportunity and playing its tourism card accordingly, something that Queensland and other states should learn from. 

Small wonder, too, that Hobart and Canberra have been among the strongest housing markets.

South Australia also saw an impressive 14 per cent increase in visitors. 

On the other side of the ledger, there was a sharp 14 per cent drop in visitors to the Northern Territory. 

The glass very full

On HODL...

A double-shot Friday, with speeches from both Reserve Bank Governor Lowe and Assistant Governor Luci Ellis.

Lowe's speech effectively confirmed that the inflation target is asymmetric.

Although 'committed' to the 2 to 3 per cent inflation target, the next move in interest rates will be up, he noted, even though inflation is yet again set to fall below the target.

As energy and fuel price pressures ease the rate of inflation will likely drop over the second half of the year.

That's good to the extent that it eases pressure on household budgets, of course.

But, in the spirit of Mr. Micawber, it is hoped that eventually inflation will pick up again.

Amazon might have something to say about that as retail price deflation again rears its head.

Rates on hold

Whether you agree or otherwise, at least it's been made clear: the cash rate is going to be set at 1.5 per cent for a long time!

Probably a very long time.

Lowe also delivered an interesting interpretation of housing credit dynamics, noting that the slowing of the housing market had reduced demand for credit by investors, in doing so citing low mortgage rates as evidence that the reduced supply of credit has not been the main story.

The plural of anecdote is not data, but that's not quite the feedback we've been getting from mortgage brokers. 

Semantics, maybe, given the reflexive nature of such things.

Luci on lags

Assistant Governor Ellis also presented an interesting speech on lags, showing how the unemployment rate has been improving (if not very much for the long term unemployed).

No arguments there, although building permits are now falling away outside Melbourne (OK, and Hobart), while money growth is now at the lowest level in more than a quarter of a century. 

If those weak leading indicators persist, then eventually the economy will start to slow too...yes, it's those pesky lags again!

Maybe that's already happening, according to the timeliest business surveys.

The labour force figures released this week also showed that the growth in hours worked is already on the way down. 

Long story short, inflation is low because the economy remains well below its full capacity.

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Some international housing market news, rents in Ireland are up by 75 per cent since 2011 to the highest ever level, in many cases rising at 15-20 per cent per annum.

With soft wages growth and restrictions on high LVR lending it's become very difficult for younger homebuyers to enter the housing market. 

Silver stackers

Silver lining

One for the contrarians and bottom pickers.

The silver price has now fallen for a 10th consecutive week.

That's the precious metal's worst ever run.

Not much joy to be seen here over 10 years.