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).

Get Invested podcast with Bushy Martin

Podcast: uncertain times

Great to back on the podcast airwaves with the great Bushy Martin.

See here for more or click the image below:

New cases fall again

Shaka Demus & fires

Being a Prime Minister is a gruelling job at the best of times, but what an intense year Scott Morrison is having, with a series of rolling crises almost from the moment he seized control and won the election.

The shock result at the polls gave way to little time to be wasted, as a worsening drought escalated into the worst bushfires in years.

The government was always on the back foot after the infamous lump of coal in parliament incident.

And the optics deteriorated further when Morrison was inadvertently snapped flipping the 'Shaka' hand signal while enjoying a few bevvies on hols in Hawaii, while back home rural communities grappled with catastrophic devastation.

No sooner was that crisis fading from the headlines, than came the Coronavirus.

Cases decline

While nobody wants to jump the gun and declare that Australia is winning the battle with the highly contagious COVID-19 virus, the numbers have quietly continued to improve all week.

New confirmed cases declined to just 190 yesterday, far below the peak of 460 back on March 28, and so the curve for total cases has been flattening. 

This is highly unusual for an Anglophone country of Australia's population size, where there isn't necessarily the strong social norm towards obedience (let alone use of facemasks) seen in some Asian countries or elsewhere in the world.

On the other hand, the snarks might quip drily that living in a nanny state may have a few positives after all!

But whatever the reasons, the numbers this week have been surprisingly improving.

At the state level, New South Wales saw 104 confirmed cases yesterday, well down from the daily peak of 212 on March 28, for a growth rate of +4.4 per cent. 

All other states and territories saw just 30 or fewer confirmed new cases yesterday, and growth rates have eased off significantly.

Jungle drums beating

Since New South Wales isn't reporting totals for recoveries, we have to make some  assumptions on how many cases remain 'live' so to speak. 

It's too early to say we're out of the woods yet, since there have been nearly 4,500 cases over the past 14 days.

As such we need to wait to see how these known cases transmit into the wider community.

Nevertheless, analysts will be watching this week's figures very closely for any further signs of improvement.

With so many parts of Australia recording only very low case figures, already the right-wing media is calling for the economy to be opened for business again, while the government insists that for now the 'suppression phase' must continue.

How and when the economy is allowed to open for trade again remains an impossibly deft decision, with the risks to be weighed up on each side. 

A widespread and rigorous test-and-trace program seems likely to be the most sustainable way to proceed, while the borders can't reasonably be opened until there's a proven method for testing all entrants (and quarantining where necessary).

Meanwhile, everyone in Australia hopes for some more good news this week.

Queensland reported just 9 new cases this morning - the lowest in weeks - while for Victoria the figure was only 20.

With New South Wales also reporting a fall the early indications point to fewer than 150 new cases today.

US job bleeding begins

701,000 US jobs go

Consensus had expected that 100,000 jobs could go in March in last night's US figures, but in the end the figure was seven times that at -701,000. 

Thus the record run of 113 months of job gains was spectacularly brought to an end in March 2020.

Consensus was for an increase in the unemployment rate from the lowest levels since the 1960s to 3.8 per cent, but the spike was larger than expected here too, jumping to 4.4 per cent in March. 

For what it's worth, average hourly earnings increased +3.1 per cent over the year to March.

Early indications from the 10 million initial jobless claims suggest that the past decade of strong job gains could be quickly undone, while the US unemployment rate could spike to 20-30 per cent in the second quarter of 2020. 

Policymakers have nowhere to go but throw the kitchen sink and everything else at the economy, but the more pressing issue is the exponential growth in COVID-19 cases.

The US now has more than 275,000 cases, and the growth rate is still tracking at double digit levels, perhaps implying a further doubling over the coming week. 

Compare this to Australia with its 5,362 cases, high level of testing, and each of the most populous states having brought the growth in new known cases down to under 5 per cent (to date).

The Dow Jones closed down -2 per cent at around 21,000, down so far from above 29,400 in February.

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It's been an interesting few days for oil, with prices ripping about 50 per cent higher on the mooted OPEC deal and Saudi/Russian supply cuts.

Don't get me wrong I'm very optimistic for oil over the medium term, but it's hard to paint an optimistic picture in the short term given the massive drop in demand and glut of supply.