After dropping earlier this week, the Australian dollar has rallied on the news that China's economy grew by 6.4 per cent over the year-to-date, and industrial production surged 8.5 per cent last month. This is excellent news given Australia's economic reliance on China's prosperity, and a positive example of how stimulus measures can impact economies under pressure.
Our mortgage-reliant economy and banking sector will need a similar boost. Treasury forecasts have revealed that the still-softening housing market is the key risk to be faced by whichever mob wins government in May. Bernard "Avocado" Salt reckons that the 7.3 million Australian millennials aged 18-37 are going to vote based on who they think will help them buy a house...an oversimplification, but the numbers are striking.
Maybe they should just look at western Sydney. Domain figures show almost ridiculous price drops in places like the Blacktown LGA, with some streets taking a 30 per cent hit between peak and December / January lows. SGS Economics and Planning did however point out that these were the extreme examples; more modest growth areas have not dropped nearly as starkly.
Melbourne greenfield land prices have also caused conniptions for people who contracted at the height of the boom and are now having to find more cash to make up for valuation decreases. It's not all bad for Melbournites though; according to the HIA's Population & Residential Building Hotspots Report, Melbourne's west is Australia's fastest growing new housing market. What's really interesting about the top-20 ranking is what it says about Blacktown in context of the paragraph above; it ranked as the fourth-fastest growing housing market in Australia.
You'd think property investors have been copping enough of a pasting, but that's not the view of the ATO. It's pointing the cannons their way after finding nine out of 10 rental deduction claims contained errors in 2017-18 filings.
The builders of Opal Tower, Icon is becoming a cautionary tale for anyone involved in major resi projects. It was announced yesterday that Icon is on the hook to provide rental compensation for landlords in the beleaguered tower until remediation work is completed. Icon's Japanese parent, Kajima Corporation has already had to put a 20-year defect warranty on the building.
Speaking of money problems, the sharks may not exactly be circling around Grocon at the moment, but the smell of blood is in the air. This piece from today's SMH suggests there's trouble brewing across the business, citing an ongoing legal stoush between Dexus and a couple of Grocon subsidiaries as the most recent example.
Up to sunnier climes, and the High Court has upheld a Queensland law banning political donations from property developers.
...and more handy crib notes for millennials from the ABC today, this time on how to find a financial advisor you can trust.
I'll be taking a break next week. Happy Easter, and see you April 29.