by Alan Thornhill
Apartment prices fell – by 0.2 per cent – early this year for the first time since the September quarter of 2012.
The Bureau of Statistics said the fall was registered on its Residential Property Price Index.
It occurred as the July 2 elections approached.
The index covers the nation’s eight capital cities.
The bureau said attached dwellings, such as apartments, largely drove price falls.
It said the attached dwellings price index fell 0.8 per cent in the March quarter.
Falls were recorded in Melbourne (-1.3 per cent), Sydney (-0.6 per cent), Perth (-1.1 per cent), Canberra (-1.1 per cent) and Adelaide (-0.4 per cent).
But there were also rises.
In Brisbane apartment prices rose 0.7 per cent, Hobart prices rose 2.3 per cent and those in Darwin rose 0.1 per cent.
Established house prices for the eight capital cities were flat.
The total value of Australia’s 9.7 million residential dwellings increased $15.4 billion to $5.9 trillion.
The average price of dwellings in Australia is now $613,900.
by Alan Thornhill
The value of new home loans let in April fell by 1.8 per cent, on seasonally adjusted figures that the Bureau of Statistics published today.
On trend figures, though, the fall was much smaller at 0.3 per cent.
The biggest fall, though, was in fixed loans taken out for investment housing.
These fell by 5 per cent in April.
Differences in the housing tax policies that the major parties are taking to the July 2
elections are the probable cause of this fall.
by Alan Thornhill
Malcolm Turnbull told Parliament today that the government wants Australians to be paid their entitlements as fast and efficiently as possible.
The Prime Minister was replying at question time to the Opposition Leader Bill Shorten who had asked about a report in today’s West Australian that which said the government is planning to privatise both Medicare and the PBS.
Mr Turnbull said the government is always looking for ways of bringing the delivery of its services into the 21st Century.
Australians now commonly use their smart phones to transact their business.
Yet Medicare procedures are still firmly paper based.
So the government has been looking for ways to bring the large number of Medicare and Pharmaceutical Benefits Scheme transactions conducted each day into the 21st Century.
Mr Turnbull also said the only way young Australians could look forward to secure well paid jobs, in the longer term, was if their employers also kept their operations up to date in this way.
”This is about making it simple for patients to transact business with Medicare,” Mr Turnbull said.
by Alan Thornhill
The Turnbull government has maintained its lead over Labor in the latest Morgan poll.
It would easily win an election held today.
The poll results, published today , give the government 56 per cent support, on a two party preferred basis, to Labor’s 44 per cent.
They also show confidence in the government up 2.5 points to 122, its highest level since March 2011.
Pollster Gary Morgan said the study showed the Turnbull Government’s honeymoon continuing as Australia heads towards Christmas.
This week Prime Minister Turnbull has travelled to the Commonwealth Heads of Government Meeting in Malta – his first meeting with the Queen since becoming Prime Minister – and on to the United Nations Climate Conference in Paris.
“However, despite the issues of Global Warming and terrorism dominating the news headlines lately, Turnbull’s most important task as Prime Minister is to ensure a growing Australian economy which provides gainful employment to as many Australians as possible.”
“Ultimately it is job creation and sustainable economic growth in Australia which will decide the success or otherwise of Turnbull’s Prime Ministership,” Mr Morgan said.
“To be a successful Prime Minister Turnbull needs to take advantage of the boost to confidence his ascension to the top job has created …. and not allow Labor and the Greens to obstruct the implementation of overdue reforms to the Australian economy.
“If they continue to hold-up needed reforms, Turnbull must bypass this ‘blackmail’ and let Australian electors decide by calling an election early in 2016.” Mr Morgan added.
by Alan Thornhill
The good times are already rolling again, for many Australians.
This is shown in new figures, published by the Bureau of Statistics.
They reflect strong – and sustained – growth in private wealth, over recent years.
In fact, the Bureau reports, the net worth of Australian families passed the $8 trillion mark, in the first three months of this financial year.
Strong growth in the value of our financial assets had a lot to do with that.
But the overall growth, in our accumulated net worth, in the March quarter, was also impressive.
After all, that was just $7.859.54 billion in the final three months of last year.
It is now $8.0909 trillion.
So what happened?
The Bureau reports that the rise in household wealth in the March quarter had been driven by gains of $207 billion in holdings, particularly in our shares and superannuation.
And it had occurred despite a fall in the amount we have been saving.
The Bureau said household net saving, in the March quarter, had been $16.4 billion.
That was well down on the $22.8 billion we had saved in the previous quarter.
The Bureau also reported that the value of our holdings of financial assets, including shares and superannuation, rose by $129 billion during the quarter.
It said this was the largest quarterly gain, of its kind, on record.
The value of our superannuation grew by 4.8 per cent in that time.
The Bureau said this was the highest quarterly rise, on a percentage basis, since the rise of 8.4 per cent in the June quarter of 2012.
It said, too, that the value of our shares and other equities had grown by 5.7 per cent in the March quarter.
In fact, the Bureau added, household net worth has now continued to grow over the past eight quarters.
However it also noted that growth in the value of household financial assets – at 4 per cent – had outpaced growth in the value of both residential land and net dwelling assets, in the first three months of this year.
The value of residential land rose by 1.9 per cent in the quarter, while dwelling assets rose by 1.4 per cent, in that time.
But the family home is still a very big item, in accounts of household wealth in Australia.
The Bureau acknowledges that.
In fact, it put the value of our land an dwellings, in the March quarter, at $5,451.8 billion.
That left the family home well and truly ensconced in its traditional place, as the centrepiece of private wealth in Australia.
The Bureau also noted that we held $4,131 billion worth of financial assets, such as superannuation and shares, in the first three months of this year.
But we also had $2,121.6 billion worth of household liabilities -like outstanding mortgage debt – at the end of March.
Australians, who have substantial financial assets, have made some impressive gains, over recent months.
The value of our superannuation holdings grew by $104.9 billion – or 4.8 per cent in the March quarter.
The Bureau said this was the biggest percentage increase seen in this indicator, since the 8.4 per cent rise, chalked p in the June quarter of 2012.
The value of our shares – and other equities – grew by 5.7 per cent – or $37.1 billion – during the quarter.
Percentage-wise, this was the biggest rise seen since the 6.1 per cent growth recorded in the March quarter of 2013.
by Alan Thornhill
Worries about costs – and job insecurity – made Australians more anxious between April and June, according to a new study.
These development are reflected in the results of the National Australia Bank’s quarterly Consumer Anxiety Index, which were published today.
The bank said consumer anxiety rose despite falling concerns over government policy after the federal budget.
“Cost of living pressures were the main cause of stress for Australian consumers, but worries over job security increased the most.” it said.
“More consumers are paying off debt and spending more on ‘essentials.'” the bank said.
But it added: “somewhat encouragingly, however, fewer consumers cut back their spending on “non-essentials.”
The bank’s Chief Economist Alan Oster said:”… consumers seem to have responded positively to the May federal budget.”
But he added:” cost of living pressures are now causing the greatest stress…”
“… but anxiety has increased most in relation to job security where stress levels are at their highest since early-2013,” Mr Oster said.
Other key findings included:-
* Overall anxiety increased most in Tasmania, which replaced Victoria as the most anxious state.
* There was a large increase in anxiety among divorced people, part time and professional workers.
* Divorced people overtook low income earners (under $35,000) in having the highest levels of overall anxiety.
* Anxiety was notably lower for young men (18-29), with this group now also reporting the lowest levels of overall anxiety (replacing widows).
* Stress levels for labourers and consumers living in Queensland were also notably lower.
Mr Oster said that – overall – consumers are still wary.
“More consumers are electing to pay off debt and are spending more on ‘essentials’ like health, transport, utilities and groceries,” he added.
Retirement funding and providing for the future are still the most worrying items in family finances.
“Somewhat encouragingly, however, fewer consumers cut back their spending on non-essentials such as travel, eating out, personal goods and major household items during the June quarter,” Mr Oster said.
He said that is consistent with a further slowing in the savings ratio.
by Alan Thornhill
The Reserve Bank Governor, Glenn Stevens, says Australians may have been focusing too closely on “exuberant” Sydney house prices.
And a new property price survey, by the National Australia Bank, added weight to his remarks.
Addressing the Australian American Association in New York, Mr Stevens said housing market developments in other capitals should not be overlooked.
He said home prices had also “risen considerably from their previous lows,” at a national level, even though income growth had been slowing.
“Popular commentary is, in my opinion, too focused on Sydney prices and pays too little attention to the more disparate trends among the other 80 per cent of Australia,” Mr Stevens said.
But he admitted that the Reserve Bank, too, is watching the Sydney housing market closely.
“… it is hard to escape the conclusion that Sydney prices – up by a third since 2012 – look rather exuberant,” Mr Stevens said.
Meanwhile, a new survey showed that foreign investors now account for 21 per cent of new home purchases in NSW.
The National Australia Bank, which conducted the survey, described this as “a new high.”
The bank’s Chief Economist, Alan Oster, also said the bank’s survey showed that home prices in NSW are expected to rise by another 3.3 per cent over the coming 12 months.
It reinforced Mr Stevens’ remarks.
Mr Oster said:”While expectations for national house prices strengthened over the next 1-2 years, the picture remains quite mixed across states.
“Nationally, prices are tipped to grow 2.1 per cent in the next 12 months.
Price rises of 3.3 per cent are expected in Queensland, as well as NSW.
But Mr Oster said:”the outlook for Victoria (1.3%) and SA/NT (-0.4%) was scaled back… while prices were expected to remain flat in WA.”
Mr Stevens had told his New York audience:”credit conditions are only one of several factors at work here.
“But credit conditions are very easy.
“So while the conduct of monetary policy can’t allow these financial considerations to dominate the ‘real economy’ ones completely, nor can it simply ignore them.
” A balance has to be found,” Mr Stevens said.
“To this point, the balance that the Reserve Bank Board has struck has seen the policy rate held at what would once have been seen as extraordinarily low levels for quite a while now.
“The Board has, moreover, clearly signaled a willingness to lower it even further, should that be helpful in securing sustainable economic growth.
“The Board has been proceeding with a degree of caution that is appropriate in the circumstances.
“It also has, I would say, a realistic assessment of how much monetary policy can be expected to achieve in supporting the adjustment the economy needs to make.
Any help in boosting sustainable growth from other policies would, of course, be welcome.
“In particular, things that could credibly be seen as lifting prospects for future income, and increasing confidence in those prospects, would give easy monetary policy a good deal more traction,” Mr Stevens said.
by Alan Thornhill
The Federal government has welcomed a new report which recommends a crackdown on abuses in the life insurance industry.
The report, ordered by the Financial Services Council, was delivered by John Trowbridge, a former banking regulator with the Australian Prudential Regulation Authority.
It follows concerns raised by the Australian Securities and Investments Commission.
The Trowbridge report acknowledges conflicts of interest are compromising the sector.
And it said “misaligned incentives” which “influence the quality of life insurance advice require urgent attention.”
“It is up to the industry to take the initiative to respond positively to these recommendations,” the report says.
It makes 11 recommendations, including a $1,200 cap on upfront commissions for providing life insurance advice.
Mr Trowbridge said advisers should be banned from receiving benefits which might influence which products they suggest to customers.
The report also calls for a code of practice to be developed for the sector, similar to those that already exist for the general insurance and banking sectors.
The Assistant Treasurer, Josh Frydenberg, said the report makes “a significant and constructive contribution to improving the quality of advice for consumers.”
He said the government is already consulting with the industry and consumer groups on these issues.
It would consider the Trowbridge report in this context.
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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