The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Friday, May 4, 2012

RBA analysis of housing market: soft prices + strong rents

The RBA's analysis of the housing market is pretty straightforward. The slide in prices is slowing, with APM notably suggesting that there has been no movement in prices over the last six months (RP Data-Rismark are weaker, although we were also flat over Q1 in raw terms). At the same time, the national rental vacancy rate is very low by historical standards at around 2%, which is driving strong, above-trend growth in absolute dollar rents. The RBA specifically comments:

"In contrast to dwelling prices, the various measures of rents grew by 4 to 5 per cent over the year (Graph 3.7). Reasonably strong rental growth, together with falling dwelling prices, has lifted rental yields to around ½ percentage point above their mid-2000s level. Rental vacancy rates have been around 2 per cent since 2009, above the very low levels seen in 2006–2008 but still low by historical standards."