Cedar Woods, page-6

In the short-term, we could be a key beneficiary as financial and human capital flees Hong Kong (and mainland China) in search of safer shores. In fact, there is arguably a window of opportunity for Australia to capitalise on the enormous success it has had in crushing COVID-19 and reopening its economy vis-à-vis the rest of the world.

We should up the ante in the nation’s efforts to become both a leading global exporter of education services and the financial centre of gravity in the Asian time-zone. Our key competitor in this respect is obviously Singapore, which has one main edge: a much more business-friendly tax system.

Australia possesses numerous advantages, including superior living standards and physical amenities, a more democratic, open and multi-cultural society, and our natural resource endowments.

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If Prime Minister Scott Morrison does seek to make Australia a destination of choice for the best brains in the business, the ensuing skilled migration flows will support productivity, growth, and aggregate demand. It would also present upside for bricks and mortar.

After national house prices increased over the first four months of 2020, they have unsurprisingly corrected ever-so-slightly in May 2020. May is the second seasonally softest month of the year wherein home values normally fall by about 0.2 per cent relative to other months in the year.

CoreLogic’s daily hedonic index has capital city home values off about 0.4 per cent over the first 28 days of May. Yet if we seasonally-adjust this data, dwelling prices have declined by only 0.2 per cent.

This is in line with our view that house prices will be flat to down by at most 5 per cent nationally for a short period of time until the boom reasserts itself on the back of the 75 to 150 basis point reduction in mortgage rates since mid-2019.

Auction clearance rates have bounced and are now well-above levels evidenced this time last year, albeit on lower volumes.

CoreLogic’s head of research Tim Lawless says that “while new listing volumes have increased in May, total listings remain around record lows, suggesting that the rate of absorption is healthy”.

Put differently, supply is weak while demand remains robust, which augurs well for the market’s overall stability.