Resi prices up 5pc in Q3, led by Hobart

Peak of the boom

Residential property prices rose 5 per cent in the September quarter across the 8 capital cities, to be 22 per cent higher than a year earlier. 

As one might expect, detached house prices have outperformed attached dwellings since 2003, with an acceleration in house prices through the pandemic. 

Over the past year house prices increased 25 per cent, as compared to only half that for attached dwellings. 

This has been true even in the most mature and expensive capital city, Sydney, though units have been attracting more interest lately due to affordability challenges. 

Hobart led the way with a massive 8 per cent increase in the September quarter, while Sydney, Canberra, and Brisbane each recorded a 6 per cent rise.

Hobart has been the top performing capital city since 2003. 

The mean dwelling price increased by $154,500 over the past year to $863,700, with increases of over $200,000 in New South Wales and the ACT.

The total value of the dwelling stock increased to $9¼ trillion.

You can get all the good oil from data king James Foster here. 

New Podcast: Rent-vesting with Chris Gray

New podcast

This week's podcast, Chris Gray explains how to make rent-vesting work for you. 

Tune in here (or click on the image below):

Of course, you can also tune in at Apple podcast here, as well as on Spotify or elsewhere. 

Lots and lots of auctions

Auctions

Big volumes of property listings and auctions going to calendar year-end.

Clearance rates sliding lower as buyers have much more choice now.

Domain with the preliminary infographic:

Source: Domain

US unemployment plunges to 4.2pc (look out!)

Labor market tightens

US nonfarm payrolls printed at only +210,000 in November, well below market expectations of +550,000, with previous months revised up by a further +82,000. 

But there was a big drop in the unemployment rate, from 4.6 per cent to just 4.2 per cent, while the key measure of the underemployment rate fell sharply from 8.3 per cent to 7.8 per cent.

The Federal Reserve is now speaking more about accelerating its taper.

Indeed, with inflation at 6 per cent, and now unemployment at just 4.2 per cent, it's quite a marvel that the central bank is still creating $105 billion per month with asset purchases at all. 

There are still concerns around virus variants and what-not, but the general narrative has taken a turn in a more hawkish direction.

It’s seemingly impossible to predict almost anything at the moment, but presumably over-valued stock markets may get  a bit of a nudge on this news. 

97-year old Charlie Munger commented in an interview that the current environment for stocks and cryptos is the most extreme he has ever experienced - even crazier than during the dotcom bubble.

But what would he know? :-) 

7 News on the Xmas window for homebuyers

Summer selling season

In their lead article, 7 News took a look at the potential window of opportunity for property buyers here (or click on the image below):

Housing finance peaked in H1 2021

Commitments retracing

Housing finance eased another -2.5 per cent to $29.5 billion in October, excluding refinancing.

The decline was driven by homebuyers (-4.1 per cent), but investment loans increased 1.1 per cent.

The impact of the lockdowns on home loans in Sydney and Melbourne is clear in the graph. 

First homebuyer numbers are normalising, but were still quite high in historic terms, with home ownership rates increasing through the pandemic. 

The average loan size for homebuyers was $86,000 or 18 per cent higher than a year earlier.

Softer numbers, in line with more balanced market conditions, but homebuyer commitments will quite likely pick up again in due course as borders and the major economies reopen.

The unusual Xmas window

Border closures

There's never been a year quite like it. 

There are more listings coming online now, but as yet, few international arrivals.

Interesting graph on a historic year for net overseas migration here (or click on the image below):

3 reasons the economy should bounce hard next year

Another srhinking

Lots going on in Australia's national accounts!

The economy, as measured by GDP, shrunk by -1.9 per cent in Q3, but remained +3.9 per cent up from a year earlier. 

Plenty of the year-on-year charts and graphs have looked rather wild lately, due to the hugely distorting impact of lockdowns.

Looked at quarterly, the -1.9 per cent wasn't too damaging, easily beating market expectations of a -2.7 per cent decline, though other income measures were hit harder, and hours worked fell by more than 5 per cent. 

Nominal GDP took a decent knock this quarter, though it was still up by 11 per cent from a year earlier. 

Strong rebound in the post

Obviously a fairly miserable set of headline numbers, then.

Generally, though, what we've seen elsewhere in the world is that when economies reopen, they reopen strongly.

There are at least three reasons why Australia should see the economy come firing back as Sydney and Melbourne get back up to speed.

Firstly, Australia is an exporter of commodities, and the key commodity prices have been running hot. 

Secondly, Australia has had in place some of the most substantial stimulus measures going (perhaps in part due to the preceding mining boom shoring up government coffers). 

The household saving ratio surged back up to just shy of 20 per cent in the third quarter as disaster payments kicked into gear - and more households were unable to socialise and spend - and the accumulated effect has been that households are now sitting on hundreds of billions of dollars in excess cash and deposits. 

That's a huge war chest of cash ready to be spent over the coming months.

And thirdly, although fixed mortgage rates are off their lows and creeping higher, the cash rate is likely to remain stuck at the zero lower bound for some time to come, freeing households to spend big next year.

Indeed, mortgage stress is now at record lows. 

Lots happening, indeed - more detail from the data king James Foster here!