Job ads rose for 8th month

Guns for hire

Job advertisements continued their strong trend in December 2020, rising for an 8th month, despite a modest decline in Victoria, according to Department of Employment figures. 

Advertisements rose by +2,300 to 171,500, to be an impressive 11 per cent higher than a year earlier. 

Source: LMIP

Things are looking especially strong in the resources states. 

Sydney and Melbourne have been the powerhouse economies since 2012, but have suffered from a lack of immigration in 2020. 

NSW mortgage size hits record

Lodgements at record high

Australia's largest mortgage aggregator reported a record quarter of $19.9 billion in lodgements in the final quarter of 2020. 

The average mortgage size in New South Wales surged to a record high, while Queensland also reported a record high average mortgage size. 

It was a strong quarter for lending in New South Wales, Queensland, Victoria, and Western Australia.

With record low mortgage rates more borrowers than every before are opting to pay down mortgage debt, with a record high 88 per cent of borrowers choosing principal and interest products.

With interest-only loans fading out this is keeping a useful lid on debt loads and ratios. 

But this was a huge quarter for AFG, with volumes 30 per cent higher than the corresponding quarter of the prior year. 

Payrolls keep climbing over the year

Jobs return

Payrolls experienced the usual seasonal dip in December, but take a look at the December results compared to a year ago.

Total employment looks set to recapture record highs in 2021 in Australia, which is a remarkable effort in such a short period of time.

Source: Fabo, Macquarie

New home sales have also soared as buyers rushed to beat the year-end deadline for the HomeBuilder stimulus.

December house sales were up 92 per cent in the month to be 100 per cent higher than a year earlier. 

Source: HIA

This is the biggest lift in new home sales in two decades. 

Meanwhile listings are being mopped up at a fast pace, taking stock on market towards record lows on CoreLogic's figures:

Source: CoreLogic

Only post-lockdown Melbourne has more listings than a year ago - almost everywhere else has seen monster declines. 

Roy Morgan's latest survey showed consumer confidence with regards to future finances rising to a 15-month high. 

All this continues a steady stream of positive economic data for Australia.

But with no clear plan emerging to allow international travel...airlines, aviation, and tourism businesses face insolvency, and, with international students now leaving the country, the higher education sector also faces disarray. 

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More Oz leavers than arrivals

Population outflows

The provisional December 2020 figures from the ABS showed more people leaving Australia than arriving.

There were an estimated 35,100 arrival trips in December, 17,800 of which were returning Australian citizens.

This is the highest monthly arrivals figure since the shutdowns began in April last year, with tens of thousands of expats still waiting to find a viable route home. 

However, there were an estimated 49,900 departure trips, more than 12,000 of whom were international students on temporary visas, largely returning to China, India, and other parts of Asia. 

Source: ABS

Even if net immigration was zero the population of Australia will still be grow by about +150,000 per annum or +0.5 per cent, due to deaths being lower than normal this year, and births continuing roughly as normal. 

But there will be some interesting compositional shifts, with fewer students and backpackers around (cf. the desperate student rentals and short-stay markets) and ultimately more returning expats.

Affordable 10-year property plan

WePlan: affordable property plan

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Housing lending surges to record

Lending surges

First homebuyers commitments hit the highest level since the Rudd stimulus of 2009 in November 2020, as Victoria rebounded strongly post-lockdown.

Owner-occupier lending is exceptionally strong in New South Wales, Queensland, and Western Australia.

And, as expected, investment lending is now increasing, up by 6 per cent in November to be higher than a year ago, also driven by strength in New South Wales and Queensland. 

RBA research showed that a permanent 100 basis point decline in the cash rate would likely result in a 30 per cent increase in real housing prices after about three years, which looks eminently possible from these figures, with supply-constrained markets with a concentration of investors seeing the largest effect.

The outlook for investment grade apartments

Investment units

Stuart Wemyss runs through the numbers for us (video below):