Today in property: home loan arrears rising, states bet on infrastructure, NSW prudent or Pollyanna?
March quarter was dire, but the worst appears to be behind us
Last night's TV news may have focused on the sharp property price falls in every capital city during the March quarter, but CoreLogic's assessment of the latest ABS property price stats was more sanguine. As we know, its more recent figures show that the market has improved since then - and while we're still in a period of decline, "the signs of recovery (are) detectable."
Another big news story last night was figures showing that home loan arrears are up. The Reserve Bank told Canberra yesterday that about 1 per cent of Australian home borrowers are more than 90 days behind on payments - but that this number is relatively low compared to other like-for-like countries; you'll find a graph here.
Looking inward however, mortgage arrears haven't been this high since 2010. It's significantly worse in WA and regional QLD compared to other states and territories. The RBA was at pains to point out however, that these figures mean 99 per cent of housing loans are on or ahead of schedule.
While we're talking RBA, Dow Jones's James Glynn presents the argument for cutting rates again as soon as possible. The core point is that the RBA is on its Pat Malone at the moment trying to avert a rise in unemployment; failure to do so will make a precarious economic situation critically worse. See previous point re home loan arrears as a case in point.
State budgets good for builders
NSW and SA both released state budgets yesterday. In NSW, treasurer Dominic Perrottet is copping a bit of stick from some quarters for what is being argued as an overly-optimistic assessment of recovery of the state's housing market. NSW had to temper its approach given the loss of stamp duty revenue over the past year, while at the same time ramping up spending on infrastructure.
Speaking of which, a big story today is the total debt base across the five Australian mainland states that is building up thanks to capital spending. Together, they'll have racked up $170 billion in debt within four years to fund infrastructure development. The AFR is calling it a splurge - but maybe they ride a bike to work.
Back to NSW, and we're talking $93 billion to be spent on infrastructure over the next four years. It's a good day to be a road, bridge, hospital, school or transport infrastructure builder.
Looking across to the city of churches, and the SA government is introducing a $105 million package to help housing market builders, tradies and home buyers - including the introduction of a deposit gap loan scheme of up to $10k for lower-income borrowers under HomeStart.
In other news...
The director of the Association of Accredited Certifiers, Robert Marinelli has led the charge calling for increased official oversight of high rise developments, in the wake of the Mascot Towers situation.
Colliers International has released a report saying despite currently soft trading conditions for retailers, the longer-term outlook for bricks-and-mortar retailers is strong. It's arguing that nine out of 10 of the most-visited shopping websites in Australia were owned by traditional bricks-and-mortar retail companies.
Resi Ventures is quitting its 900-lot house-and-land Rockbank project in Melbourne's West, citing changes to Victoria's stamp duty laws and taking a swipe at what is says are taxation practices that are "stifling developments they set out to tap."