June 12, 2024 by Dymphna

Silver medal in house building but still stuck with a shortage: the economy in pictures

See the world through the eyes of an economist: Lending, construction, container rates and action films.

These are the charts that caught my eye this week. First up, housing finance (one of the most accurate predictors of house prices) is growing strongly, led by investor lending, which is up a huge 36% over the year.

Investor activity has been led by Western Australia (+70.5%) with South Australia, Queensland, and New South Wales all growing by around 44% year-on-year. Victoria remains the ugly duckling of Oz property, with investor growth stalling out.

On the construction front, building approvals fell in the month of April, putting the government’s ambitious housing targets further out of reach.

Shane Oliver at AMP now reckons that the housing undersupply in Australia is something like 200,000 homes. I reckon event that’s conservative.

But it’s also worth remembering that Australia is pretty good at building houses. Over the past decade, we built more houses per head of population than any other country on earth, outside of Switzerland. It wasn’t enough to keep up with immigration-driven population growth though, and its still shortages as far as the eye can see.

Turning international, there’s been a concerning double-lift in shipping rates. The bench mark container rate is more than double what it was at the end of 2023. It’s still nowhere near the Covid peaks, but it is still a worrying sign for inflation.

Especially since the ships themselves are continuing to get more expensive, having given up none of the gains they made through Covid.

Finally, action movies are getting more tame. Since 2000, top action movies have had less sex, drugs and swearing, although about the same amount of violence.

There’s also been a substantial lift in films with zero sexual content. What’s going on? Are we becoming more prude?

And that’s how the world looked through the eyes of an economist this week.