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Wednesday, 15 April 2020

The life of a Thanksgiving turkey

Flattened curve

It's been another day of very low figures for new confirmed cases of COVID-19, with the growth tracking at well under 1 per cent for the fifth day in a row (the final figure could be closer to just 0.5 per cent for today). 

There had been fears that Australia's expanded capacity of 7,000 ICU beds could be overwhelmed, but the measures to date have been so effective that there are now just 74 cases in ICU. 

Recoveries are comfortably outstripping new confirmed cases (which only saw a net increase of 34 today), as they have been for some time now.

As such the number of 'active cases' has almost halved since peaking in the first week of April. 

Up here in Queensland we saw just five new cases today, which was the lowest figure since all the way back on March 10. 

The most populous states of New South Wales (16 new cases reported today) and Victoria (8 new cases) are home to a combined total of nearly 15 million persons, so in that context the new case numbers have fallen to remarkably low levels.

Canberra, the ACT, South Australia, and Western Australia (ex-cruise ships) have all consistently seen very few or zero new cases over the past week, while the Northern Territory has seen no new cases at all for well over a week.

North-west Tasmania, where there has been a cluster, saw four new cases today. 

Chinese arrivals halted (Turkey shoot)

A quick look at today's arrivals and departures figures. 

Well, it's a bit like the famous old chart chronicling 1,001 days in the well-being of a Thanksgiving turkey.

Chinese short-term arrivals into Australia fell to a seasonally adjusted total of just 19,500 in February, to be down by about 90 per cent. 


There were still some 72,500 international arrivals for the purposes of education in the month, but February is normally one of the two months of the year wherein far higher numbers are expected, as students are typically expected to return from their Xmas break.

And it was not so this year, as many international students were stuck in China or elsewhere. 

Australia has long seen its economy juiced by relatively high intake resulting from net overseas migration, international students, and tourism from China and other parts of Asia. 

To date, there's been less impact showing up in the figures for permanent and long-term movements.

Indeed, there were still some 97,840 permanent and long term arrivals in the month, and only 32,930 long-term departures, although the next intake is often higher than this in sunny February. 

These figures will naturally slow through the remainder of Q1 and Q2, however. 

Thus while the economy might see a staged re-entry to business trading, things can't really 'return to normal' until the borders can be opened again, which must obviously take time. 

Out of interest, the IMF is forecasting a very strong rebound for Australia's economy in 2021 - faster than the US, UK, Germany, Canada, or France - though how they actually arrived at these figure is anyone's guess. 

Source: Joiner, IFM Investors

A sceptic might justifiably ask how their 2020 forecasts are tracking so far...

Listings down

There's not been too much sign of forced selling in the housing market just yet, with new listings all but cut in half.

Source: My Housing Market

Resi construction is also forecast to all but dry up this year, with annual dwelling commencements tipped to dip below 100,000 over the coming quarters (UBS), which would the lowest rate of new supply since 'at least 1960' (h/t Scutty).

In fact, we're still seeing plenty of competition for the limited amount of new stock in blue chip areas, and even some examples of prices going above price guides. 

It's extremely doubtful that's the case in outer suburban areas or regional hubs, though, as rising unemployment and underemployment begin to bite.