Stock dries up

Cobwebbed

There was a large fall in listings on the property market in April 2019, largely driven by Sydney (-7.2 per cent), according to SQM Research's latest figures. 

Looking at the aged stock data, listings <30 days dived from 75,900 in March to just 51,806 in April as vendors pulled up the ladder. 

In fact there were sharp falls in available stock everywhere but Canberra in April. 

In Sydney total listings dropped to just 27,101, down from 33,610 a year earlier, for a year-on-year decline of nearly 20 per cent. 

There were similarly large declines recorded across many of the capital cities over the year to March.

Meanwhile, Cameron Kusher at REA Group reported that property searches were up +41 per cent from a year earlier, being the biggest increase across the data series. 

Source: REA Group

Some of the searchers may simply be bored at home, or wondering what's happening to prices.

But a fair portion are likely looking towards the reopening of the economy and buying property again - from the diminished pool of stock - encouraged by record low mortgage rates. 

SQM also reported that asking prices increased modestly both for the past week and the past month (both for units and houses). 

Podcast: Life after the recession

Post-COVID-19 podcast

A look into the future today on the Yardney podcast.

Tune in here or click on the image below:

Don't forget to subscribe here so you never miss an episode.

China infrastructure bulls ramp up

Approvals steady

Building approvals fell by -4 per cent in March to 15,279, a far cry from the peak of the construction cycle when more than 20,000 per month was commonplace. 

Melbourne is still seeing a fair number of apartment projects approved, meaning that numbers held up better than expected for the month of March. 

House approvals in Melbourne have also been surprisingly upbeat.

As a result, overall approvals held up better pretty well in March, but further declines are to be expected over the remainder of 2020. 

As ever you can find more detailed analysis from Aussie data king James Foster here. 

Grand reopening

Victoria continued its Coronavrius testing blitz today and discovered 19 further cases of COVID-19 related to the 'meat processing facility'. 

There's something about abattoirs and meatworks that seems to spread this virus badly, and not only in Australia.

There's never been a better time to go vegetarian, I'd say! :-)

Other than that, cases were once again very low all around the country, with practically speaking no instances of community transmission, and total ICU cases declining even further to just 28.

Australia has seen fewer than 100 deaths from the Coronavirus, and only 3 under the age of 60, which is a remarkable result, relatively speaking. 

As such the economy is already steadily reopening for business.

And let's not forget the Australian government has put in place a monstrous $320 billion stimulus package, the equivalent of 16.4 per cent of GDP over the forward estimates.

For context the controversial Rudd stimulus was a relatively trifling $51 billion or so.

Of note is that the present stimulus packages were designed with a 6-month hibernation of business and the economy in mind, but it now seems as though we won't face anything like as bad as that. 

Net-net, therefore, we might be in far better shape by the end of the year than was previously feared. 

Another interesting metric for the Aussie bulls is that China infrastructure seems to be ramping up apace, with steel inventories drawing fast, despite strong ongoing levels of production. 

Source: Macquarie, via @Scutty

With a bit of luck Australia might clutch onto China's coat-tails to drag us towards a strong rebound in H2 2020. 

Podcast Episode 4: Managing Exposure (introducing the Kelly Criterion and capital growth theory)

Podcast Episode 4

Tune in to Episode 4 of our podcast series here, where we discuss managing exposure, and introduce some basic ideas related to the Kelly Criterion and capital growth theory. 

There are two important parts to allocation: firstly at the macro level, and secondly at the micro level. 

Stephen discusses a little further how the CAPE ratio can be your edge as an investor, and why you can increase your allocation when the odds are clearly stacked in your favour, while looking to decrease your exposure when the odds are poor or heavily stacked against you. 

In this episode we discuss in practical terms how to look at and approach a market cycle, and how you can outperform by managing your exposure using a systematic and unemotional approach. 

Why don't people invest more when markets are cheaper?

We discuss this groupthink and more in the episode below. 

Tune in here or click on the image below:

If you prefer you can tune in to listen at Soundcloud, Spotify, or Stitcher.

You can download a free chapter from our new book here.

Rask podcast

Rask podcast

A mini-thread on Noosa's housing markets from Nick Radge, which accords closely with what I've seen up here at Noosa Springs.

There were stacks of 'For Sale' boards here in January and February, but now there are only a handful of properties for sale on the entire Springs (and it's a massive resort):

Something of a cobweb effect is developing up here in this part of the world.

Incidentally my morning run took me past the Noosa Farmers Market and they were absolutely rammed to the rafters today, since the Sunshine Coast hasn't recorded a case of COVID-19 in 25 days now. 

It was the first time that I've even considered the possibility that we might have over-stimulated if the shutdown ends in a week, as opposed to the 6-month hibernation that was being planned for?!

Rask podcast

This weekend I discussed property and other markets with the legendary Owen Rask of Rask Finance. 

And no, I can't spell his surname!

You can tune in here or by clicking on the image below:

Understanding the double coincidence of wants

Making money work for you

While out on my run around Noosa this morning, I recorded some more radical thoughts for you on understanding money and how to make it work for you (rather than the other way around).

Click here to watch or on the image below:

Weekend reads

Must see articles

This weekend at Property Update, a look at housing prices in April, interest rates, and rental markets. 

Click here to read, or on the image below:

You can subscribe for the free podcast here.

Silicon Place

Sydney's Silicon Valley

It's coming,

Via the SMH here: