Recent data hasn't been great for the Aussie economy. Even the media is onto this one. The front page of today's Australian Financial Review has these words in the headlines: 'Revolt', 'jobs crunch', 'accused', and 'affront.' But let's get to some numbers.
The Australian Bureau of Statistics (ABS) reported on loan approvals yesterday:
•The number of home loans approvals fell 0.5% to 46,199 in November, well below expectations of 0.5% improvement. •Loans to buy new properties fell a seasonally adjusted 10.3%. •Loans to build new homes fell 1.8%. •Loans to buy existing houses edged 0.3% higher in November This means Australia isn't getting much economic growth out of its housing industry of late. Wait, no it doesn't. The ABS reported on the 10th January:
...the number of dwellings approved rose 2.9 per cent in November 2012, in seasonally adjusted terms, following a fall of 5.1 per cent in the previous month.
Dwelling approvals increased in November in Victoria (8.7 per cent) but decreased in South Australia (-13.9 per cent), Tasmania (-7.7 per cent), New South Wales (-4.0 per cent), Queensland (-1.5 per cent) and Western Australia (-1.1 per cent) in seasonally adjusted terms.
This is a bit odd.
More houses were approved, but there were fewer loans for new houses.
And total dwelling approvals rose, even though only one state saw an increase.
Most interesting of all, despite an increase in the number of approved dwellings, 'The value of total building approved fell 4.1 per cent in November, in seasonally adjusted terms, and has fallen for two months.'
Hmm.
It's worth noting that one of the biggest lessons of the sub-prime crisis was that house prices had to keep rising, not just stay flat, to keep the bubble going.
People had to feel like they were getting richer by the day for them to keep paying unaffordable home loans. As soon as they lost that feeling, everyone sold out quickly.
So if Australia's housing market keeps stumbling along, based on the lessons learned from overseas, it could eventually be in for a price crash.
More financial and lending data from the ABS will be out tomorrow. But in the meantime, consider Australia's hidden debt problem.
According to the Age, 'Nearly 50,000 people have used [debt reduction] agreements during the past five years, resulting in a 20 per cent decline in bankruptcies...'
That's probably a good thing.
These people are essentially negotiating their way out of an official bankruptcy.
The interesting thing is that bankruptcy figures are now not comparable over time.
What would they look like without 'debt agreements'? A whole lot worse.
The AFR also reported that the job market might be in trouble: 'ANZ monthly job ads figures showed the number of job advertisements fell for a 10th straight month in December.
Job vacancies are now at almost half the level reached before Lehman Brothers collapsed in 2008'.
But unemployment is still low, for now.
What's interesting is that the economy is showing so many signs of struggling, but the key statistics are still looking good. GDP and employment are strong.
Is 2013 Australia's equivalent of 2007 when American economists pointed to 'strong fundamentals' even though it was soon obvious the economy was heading off a cliff?.....................................................
