So, we’ll be rooned on the real estate front, yes? That’s the message you’ll get from both of the country’s two largest media groups, Nine and News Corp — who also happen to have a huge stake in real estate sales via their respective property arms.
News Corp owns 61% of REA, the country’s biggest property website listings business, Nine (after the Fairfax Media takeover) now controls nearly 60% of Domain, the distant number two to REA. They also know that hype about property — whether of the positive or negative variety — gets people clicking on their websites.
News Corp outlets and Nine’s Financial Review have also been campaigning against Labor’s proposed negative gearing and capital gains tax reforms. That’s not just News Corp’s usual bias or the shift to conservatism underway at what used to be Fairfax — the SMH and The Age‘s political coverage increasingly consists of unquestioning reporting of government attacks on Labor.
It reflects the fear that the withdrawal of taxpayer subsidies to future property investors (remember, the vast bulk of property investment will be untouched due to grandfathering) might slightly curb the property price circus that Sydney and Melbourne have been in recent years and probably will become again.
But as the hysteria about some welcome moderation in two of our most overheated property markets continues, no one bothered to read the monthly credit data from the Reserve Bank issued on Friday.
The December credit report revealed that yes, lending to owner occupiers and investors is slowing — investor lending growth is now at its all time low (since it started being measured back in 1991) at an annual 1.1%. Lending to owner occupiers growth fell to an annual 6.5% from 6.9% in the year to November. That’s the slowest annual rate of growth since November 2016.
Cue talk of property price collapses and credit squeezes. Except… business lending grew at 4.8% in December, the strongest rate of growth since late 2016 and faster than overall home lending (4.7%). That is the first time since February 2009 that the annual rate of growth in business lending exceeded the annual growth in home lending.
That might be partly due to a softer housing market, but we also want our financial institutions pumping more money into businesses, especially small and medium businesses. Both have for so long struggled to attract investment compared to home lending because they can’t offer the security of residential real estate.
It also suggests that much of the talk of a credit squeeze is from the hype merchants and henny pennies of the property sector. It’s not coming from those who should be taking a broader perspective of the economy, in which real estate construction is just one major industry, not the be-all and end-all.
But that’s likely to be forgotten once the royal commission report is released late this afternoon (earlier for media favourites hand-picked by Phil Gaetjens and Josh Frydenberg), when vested interests, including in the media, start pushing back against Kenneth Hayne’s recommendations.
Help us keep up the fight
Get Crikey for just $1 a week and support our journalists’ important work of uncovering the hypocrisies that infest our corridors of power.
If you haven’t joined us yet, subscribe today and get your first 12 weeks for $12.
Cancel anytime.
Peter Fray
Editor-in-chief of Crikey
Leave a comment
Really? Our self-serving, narcissistic, politicised, opinion-run gutter newspress would stoop to put their own (not least political) interests above the greater community good to be well and impartially informed – in the way they’d report such things?
They’d put advertorial self-interest before the rest of us voting plebs? ….. “Codes of conduct” and all?
I’m shocked, shocked.
Proof that the Housing “Boom” was indeed sucking the life from the rest of the economy. Phew that means in 20 years time we wont all be working for either the Banks or Jim’s Mowing. (The Landed Gentry OFC wouldn’t have to work).
OR … Banks are refocusing their Scamerprise at business now that housing has been nix’d. Expect business bankruptcies to start trending up.
So housing prices have fallen by about 10% in Sydney an Melbourne. But didn’t they rise by something like 50% – 60% in the last ten years. so there has been a rise in housing costs in those cities by about 40%. Why don’t any of the commentators/journalists point this out? I think Labor policy should limit negative gearing to one property only.
Their policy is to end negative gearing, but with a grandfather clause, so that current investments are protected.
My view is that the grandfathering should be limited to 5 years, after which negative gearing is no more.
It will also be interesting what happens when the bill for Labor’s negative gearing comes before parliament.
A number of MPs and Senators (most of them?) benefit from negative gearing, so really ought to abstain if they are not voting for NG’s abolition.
I have noticed that the journalists at The Age are increasingly bland, not questioning any of morrison’s constant lies just repeating them. All the talented journos seem to have gone.
Van stone dropped quite a few whoppers in her piece today. I wish these idiots from nsw would recognise that the rudd’s stimulus worked really well in the rest of the country, rotting was mainly in nsw. The pink batts spend was a good idea in my opinion, the building accreditation system was the weak link in this one. As for lnp leaving the country with no debt for labor in 2007, this is simply false and yet it still gets wheeled out. I still reckon that there was a lot in the supposed Medicare scare campaign.
Yes bj…your last sentence is correct. There is covert ‘privatisation’ of various services in the so-called public health sector, which also are not reported accurately, if at all.
The upshot of such action is that instead of universal health care, we are rapidly left with a system of user pays, for many of these services.
A sop to the private health insurers perhaps? And a two-tiered health system?
I stopped taking notice of all the doom and gloom predictions about the property market. Prices are high because of lack of supply. Full stop. There might be a short term (minuscule) drop in the property market as we see now, or even a more severe one if interest rates suddenly rise, but in general as long as property releases are kept to a minimum, high prices are safe. I’m constantly amazed that our young ones just keep taking it on the chin, why aren’t they out there demanding changes in the system? Why aren’t there parties out there promoting much more radical changes?
Completely wrong bref. Housing prices are 99% a result of supply and demand of money, not houses. That is the lesson of the last 40 years. That housing supply/demand idea is completely bust. The house price drop off is entirely due to credit restrictions by the RBA, and restrictions from China on getting money out.
Sorry mate, economics 101, supply and demand. Easy credit just exacerbates the problem by enabling higher prices. Fancy explanations abound as to what caused the price hikes over the last 30 years, but they’re mostly BS. Prices rise when demand outstrips supply and Australia is hundreds of thousands of homes short of demand.