FHLDS: Another 10,000 places rolled out

Low deposit lending

Here comes the next round of housing stimulus:

Details of the scheme can be found here (or click on the image below):

The first round of 10,000 places was taken up in full.

Incomes are capped at $125,000 for individuals and $200,000 for couples.

Dwelling approvals sink; Melbourne home values down

Dwelling approvals fall

Attached dwelling approvals declined by -35 per cent in May 2020, to be -30 per cent lower than a year earlier, driven by Sydney and Brisbane. 

House approvals have been fairly flat over the year.

Overall, building approvals sank to 12,736 in May, which was as low as we've seen in about 8 years.

There will be further declines in June, since these figures largely relate to pre-COVID trends.

Home values 1pc below peak

CoreLogic reported that Aussie capital city home values were -1 per cent below their peak by the end of June 2020, representing a milder downturn than had been anticipated.

The decline has been driven by the top quartile of the capital city housing market, where prices are down by -1.7 per cent, as compared to a flat quarterly result for the bottom quartile (and indeed modest increases in Sydney). 

The decline has been driven by Melbourne where home values have now sunk by -2.46 per cent since April 6. 

Melbourne is potentially facing a bit of trouble here: while every other state and territory is recording zero community cases of COVID-19 Victoria has suddenly seen active cases soar to 370. 

Some suburbs have performed strongly, but more and more Melbourne businesses will close as restrictions on movement are tightened again. 

Total stock levels remain at near decade lows for this time of year:

Source: CoreLogic

If there's to be any hope of pulling Australia out of recession quickly this trend for both COVID cases and home value declines in Melbourne needs to be immediately reversed. 

The government knows this full well, of course, and a further 10,000 first home loan deposit scheme places were opened up across 27 lenders effective from today.

Consumer sentiment has certainly bounced sharply, but lenders are on average taking far too long to approve loans, up to a couple of months in many cases. 

ICYMI: The BIP Show

The BIP Show

This week's The BIP Show episode is now in the Apple Top 4 Investing Podcasts for Australia:

Listen to the full show here.

Financial stress at a very low level

Australian household finances improve

James Foster looks at the latest ABS surveys here (or click on the image below):

Very low levels of household financial stress to go with bankruptcies and insolvencies coming off quarter-century lows. 

False starts ahead for Melbourne

COVID-free

Australia's amazing run continues for COVID-19, with another day of zero community cases all around the country...except in Victoria.

Unfortunately Victoria saw a worrying 75 new cases today, which makes for the worst day since March for that state.

The curve is therefore taking a second turn north:

Overall this was Australia's worst day since April 10.

There is still on only one ICU case in the entire country, and there were no deaths.

Thus while the rest of the country is easing back restrictions, Victoria is tightening up again - and this is almost certainly going to mean more stimulus for longer.

I discussed this on ausbiz TV this morning here (or click on the image below):

Rental listings decline from a year ago

Rentals filling up

Top notch research from Louis Christopher of SQM Research.

As expats return to Australia and as rents have eased the feared glut in rental listings has dissipated.

SQM confirmed that these numbers have been checked.

Therefore expect a decline in vacancy rates to be reported in June 2020.

High quality real-time insights from SQM Research.

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Solid preliminary auction clearance rates for Sydney this weekend:

Source: CoreLogic

Podcast Episode #12: Superforecasters

Podcast Episode #12: Superforecasters

Tune in to Episode 12 of our Low Rates High Returns podcast series here (or click on the image below):

You can also tune in at Soundcloud, Stitcher, or Spotify.

Don't forget to leave us a friendly review, as it helps us to get the word out. Cheers! 

Melbourne, we have a minor problem

Melbourne hit by virus

As the US blazes through a terrifying 2.6 million cases of COVID-19 and notches record daily highs in the process, here in Australia we are left pondering some relatively minor numbers. 

Indeed, there is only one ICU case now remaining in Australia, while deaths are effectively running at zero (or less than zero when you consider how self-isolation, sanitising, and flu vaccinations have improved hygiene overall). 

The hospitals are empty, and seven of the states and territories are now effectively COVID-free.

Victoria has, however, seen a flurry of new cases over the past six days, which is turning the curve gently higher and threatening to become a problem.

New South Wales and Western Australia have put a handful of overseas traveller cases into quarantine, but all of the community cases are now being found in Victoria.

Thus while the rest of the country is easing up on restrictions Victoria is likely to see things going the other way and tightening up again. 

Given that Victoria is the second most populous state this is likely to mean that more stimulus is needed for longer in Australia. 

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Preliminary auction clearance rates picked up to 64 per cent in Sydney on Saturday with the median sold price ticking above $1.2 million, but clearance rates slumped into the 50s in Melbourne.