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."

Monday, January 16, 2012

JP Morgan: Healthy housing market sees First Time Buyers hit 20% of all loans

From JP Morgan:

"November home loan commitments in Australia were close to forecast, with a rise of 1.4%m/m (J.P. Morgan and consensus 1.0%m/m) continuing the consistent growth performance of 2H11. The result might appear disappointing in that the RBA's first rate cut of the cycle early in the month seems to have passed without much of a lift in borrowing activity. However, the reality is that, despite a general perception that the housing market is subdued, and decisively weak performance in residential building, the housing finance reports have been a lot perkier.

The home loans data therefore are not in any need of 'reflating' through explicit RBA support, given there have been signs in the detail for several months that the turn in monetary conditions (the RBA's hawkish bias eased continually throughout 2H11) and the improving affordability metrics (after a gradual moderation in dwelling prices in 2011) already had begun to stimulate some pockets of the market even before the first easing was delivered. This continued in November, with the typically marginal group - first home buyers - driving the acceleration in borrowing over the month.

Based on today's data, first home buyers (FHBs) appear to be back as a driving force after an extended post-stimulus hiatus. The FHB share of new loans hit 20% for the first time since February 2010, which occurred just after the expanded FHB grant wound off, and just before prices peaked in 2Q11. That share had remained stubbornly low in the mid-teens since, but in the last few months has jumped back up by 3%-pts."