Easy Money Investing

- Average Sydney auction prices soaring
- Clearance rates up in Melbourne, Adelaide
- Brisbane prices a fraction of other capitals

THE nation’s residential property markets are moving in different directions, with auction prices soaring in Sydney and clearances rocketing in Melbourne, but Brisbane still in the doldrums.

The Adelaide auction market stumbled in weekend sales, but remains considerably healthier than a year ago.

The results came as the Property Council of Australia warned that NSW was heading for a massive housing shortfall, and the Wesley Mission launched an appeal to help the rising number of homeless people in the state.

A survey of weekend auctions conducted by Australian Property Monitors showed 730 homes changed hands for $427 million in Sydney, Melbourne, Brisbane and Adelaide, for an average price of $585,000.

A year ago, 334 properties in the same cities sold for $175 million, at an average price of $525,000.

Strong prices reported
Prices for houses sold by auction ranged from $8.5 million for a four-bedroom house at Parsley Road in Sydney’s exclusive eastern suburb of Vaucluse, down to $170,500 for a three-bedroom house on First Avenue in Melbourne’s Melton South.

The average selling price in Sydney, at $845,000, was nearly double that of Melbourne and Adelaide, at $478,000 and $448,000 respectively, and was close to three times that of Brisbane, at $330,000.

The clearance rate in Sydney auctions was 68 per cent, compared with 53 per cent a year ago, and average auction prices were up $136,000, or 19 per cent.

The chief economist of the Housing Industry Association, Harley Dale, said the housing shortage was putting upward pressure on rents.

“The biggest challenge facing the housing industry at the moment is the supply-side problem,” Mr Dale said.

“That’s led to a very big affordability problem, which is constraining the chances of a recovery.

“We do have a dire lack of rental stock, and we do have people that are renting for longer because they’re finding it difficult to get into their first home.”

Wesley Mission chief executive Reverend Keith Garner said the charity was forced to turn away up to 900 people a year from its Edward Eagar Lodge emergency accommodation centre in Sydney’s inner city.

“Across NSW, more than 33,000 men, women and children are having the door of hope closed in their face each year,” Mr Garner said.

Clearance

Meanwhile in Melbourne, the average property price in the latest auctions improved on that of a year ago by $50,000, or nearly 12 per cent.

The clearance rate for the Melbourne auctions hit 79 per cent, compared with 55 per cent a year ago.

In Brisbane, the clearance rate was 51 per cent compared with 46 per cent a year ago, while in Adelaide clearances came to 60 per cent compared with 54 per cent in May last year.

In Perth, auctions account for only about 5 per cent of sales.

Real Estate Institute of Western Australia president Rob Druitt said the state’s property market was experiencing a “soft landing” from the massive spike brought on by the mining boom.

“A year ago was our peak, our boom,” Mr Druitt said. “Our stock levels were at the lowest we ever had - we had about 4500 homes for sale in Perth.

“Since then our stock levels have jumped to 14,500.”

Housing prices had levelled out, Mr Druitt said, with a 2 per cent increase in the March quarter, compared with an 11 per cent rise in the June quarter last year.

Median house prices in the state were now about $460,000 to $470,000, he said.

Additional reporting: Alana Buckley-Carr, AAP

Stock futures pointed a much lower open Friday on worries over the economy.

Nasdaq futures slumped 24 points vs. fair value, S&P 500 futures dropped 14 points and Dow futures skidded 116 points.

In economic news, personal income climbed 0.3% in January, slightly above expectations of 0.2%. Spending rose 0.4% double economists’ estimates. But the gain was largely due to inflation. Adjusted for inflation, spending was flat.

The Personal Consumption Expenditure index, the Fed’s preferred measure of inflation, ticked up 0.3% as expected. On a year-over-year basis, the index rose 2.2%, or above the high-end of the central bank’s comfort zone of 2%.

The Chicago purchasing managers index for January will be released at 9:45 a.m. EST. A decline to 49.5 is expected for the regional manufacturing gauge. Readings under 50 indicate contraction.

At 10 a.m. EST, the revised University of Michigan consumer sentiment index will be out.

Several Fed members are slated to give speeches throughout the trading session.

American International Group () dropped 4% in pre-market trading. Late Thursday, the financial services giant reported a Q4 loss of $5.29 billion, or $1.25 a share, hurt by credit-related derivatives. This was much worse than analysts’ expectations for a loss of 60 cents.

Assured Guaranty () surged 16% in pre-open trading. Financier Wilbur Ross will invest up to $1 billion in the reinsurance firm.

But its group mates took heat. Ambac Financial () fell 7% in the pre-market. CNBC reported that a bailout plan for the troubled bond insurer hit a roadblock. Apparently, rating agencies are demanding more money from the consortium of banks involved in the rescue.

MBIA () dropped 4% in the pre-open. In a regulatory filing, the bond insurer said it expects further write-downs due to the continued fallout in the housing market. The company also said that it’s booking new business.

Meanwhile, Deckers Outdoor () tumbled 9% in pre-open trading. The footwear maker reported Q4 profit and revenue above views, but it gave a weak Q1 earnings forecast.

Action Insight | Written by ActionForex.com | Nov 23 07 12:07 GMT |
Forex Mid-Day Technical Report EUR/USD Fails 1.5, a Top in Place?

While movements in the currency markets could be exaggerated by thin holiday liquidity, it’s clear that Euro has made a short term top against dollar, after making a record high and failing 1.5 key medium term resistance. Comments from ECB counter member Ordonez are used as an excuse to take profits on long Euro positions. Ordonez said that he saw a stronger than expected slowdown in the Eurozone as the effects of the financial market turmoil is still uncertain. The comments reminds investors that the subprime problem is not a US only problem but will likely spillover to the global economy. Other European majors, including swissy and sterling, also weaken against the greenback.

However, note that the pull back in Euro doesn’t equivalent to strength in dollar in a broad sense. Instead, USD/JPY is still hovering 2 year low. And further weakness in EUR/JPY could trigger another wave of sell of in USD/JPY too. Technically speaking, while a short term top is in place in EUR/USD, it’s too early to call for a medium term top yet. Nevertheless, more downside is likely in near term.

Data released saw mixed PMI fro Eurozone. PMI Services dropped more than expected to 53.7 in Nov while PMI manufacturing unexpectedly rose to 52.6. UK Q3 GDP grew 0.7% qoq, 3.2% yoy, lower than preliminary estimate. EUR/USD

Daily Pivots: (S1) 1.4822; (P) 1.4847; (R1) 1.4873; «www.actionforex.com»

After reaching new record high of 1.4966 earlier today, EUR/USD reverses and falls sharply to as low as 1.4783. Break of 1.4841 minor support indicates that a short term top is in place at 1.4966 after failing ahead of 1.5 psychological resistance as well as 61.8% projection of 0.8223 to 1.3668 from 1.1639 at 1.5004 medium term target. Rise from 1.4014 has possibly completed with bearish divergence condition in 4 hours MACD and RSI too. At this point, further decline is expected to be seen to short term rising channel support (now at 1.4711) and break will confirm such case and bring deeper decline towards 1.4519 support. On the upside, firm break above 1.5 is now needed to confirm recent rally has resumed. Otherwise, risk remains on the downside.

In the bigger picture, regardless of internal structure, medium term up trend from 1.1639 remains in force and is treated as resumption of long term up trend from 0.8223 (00 low) to 1.3668 (04 high) and is now close to 61.8% projection of 0.8223 to 1.3668 from 1.1639 at 1.5004 target which will overlap with 1.5 psychological resistance. Upside could be limited by this resistance initially on overbought condition. Sustained trading above this key resistance is needed to confirm medium term rally is still underway to next projection target of 100% projection at 1.7048.

On the downside, while rise from 1.4014 is likely completed, it’s early to confirm that rise from 1.3360 has completed too. Focus will be on 1.4519 cluster support (50% retracement of 1.4014 to 1.4966 at 1.4490). Decisive break this support zone will add much credence to the case that rally from 1.3360 has completed too and bring deeper correction to 1.4014/4281 support zone. But strong rebound above this level will suggest another rise should be seen before making a medium term top.

GBP/USD

Daily Pivots: (S1) 2.0573; (P) 2.0628; (R1) 2.0672; «www.actionforex.com»

Cable’s fall from 2.0765 and break of 2.0582 suggest that rebound from 2.0353 has possibly completed already. At this point, intraday bias is back to the downside for a retest of 2.0353 support. As discussed before, rise from 1.9652 has completed after touching medium term rising channel resistance. With 2.0845 cluster resistance (61.8% retracement of 2.1161 to 2.0353 at 2.0852) still holds, rebound from 2.0353 is still treated as correction only and another fall is still expected to medium term rising channel (now at 2.0033). However, sustained break of 2.0845 cluster resistance will indicate that fall from 2.1161 has completed and will bring retest of this high.

In the bigger picture, medium term rally from 1.7047, regardless of internal structure, is treated as resumption of long term up trend from 1.3680 (01 low) to 1.9554 (04 high) with subsequent correction ended at 1.7047. Break of 61.8% projection level at 2.0677 now encourages further medium term rally to next projection target of 100% projection 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.2921. On the downside, decisive break of the medium term rising channel (2.0033) is needed to signal that such medium term rally has made a top. Otherwise, medium term outlook remains bullish.

USD/CHF

Daily Pivots: (S1) 1.0996; (P) 1.1017; (R1) 1.1030; «www.actionforex.com».

USD/CHF rebounds strongly after making another record low at 1.0890 and met downside target of 61.8% projection of 1.1784 to 1.1187 from 1.1298 at 1.0929. Touching of 1.1039 resistance indicates a short term bottom is likely in place and at this point, further rebound is expected towards 4 hours 55 EMA (now at 1.1143). However, as long as 1.1298 cluster resistance (38.2% retracement of 1.1891 to 1.0890 at 1.1272) holds, the current rebound will be treated as correction only and another fall is still expected after completion. Though, firm break of 1.0890 is now needed to confirm recent fall has resumed to 100% projection at 1.0701.

In the bigger picture, the current preferred interpretation is that fall from 1.3282 was initially contained at 1.1919 and turned into sideway triangle consolidation that completed at 1.2467, where the medium term down trend resumed. Sustained trading below 1.1100 clusters support (95 low and 100% projection of 1.3283 to 1.1919 from 1.2467 at 1.1103) encourages decline to next medium term target of 161.8% projection at 1.0260. On the upside, break of 1.1298 cluster resistance is needed to be the first signal that a medium term low is formed. Otherwise, medium term outlook remains bearish.

USD/JPY

Daily Pivots: (S1) 108.08; (P) 108.62; (R1) 108.96; «www.actionforex.com».

USD/JPY recovers mildly after reaching 107.54 earlier today, touching 61.8% projection of 115.91 to 109.12 from 111.76 at 107.56. But still, intraday bias remains on the downside as long as 108.62 resistance holds. Further decline is expected to next downside target of 100% projection of 124.13 to 111.59 from 117.94 at 105.40. However, on the upside, above 108.62 will indicate a short term bottom is possibly formed and bring rebound to 4 hours 55 EMA (now at 109.91).

In the bigger picture, the three wave structure of the up trend from 101.65 to 124.13 suggests that it’s corrective in nature. Such development flipped favor to the case that the rally from 101.65 could indeed be the final leg of a long term triangle formation (147.68, 101.22, 135.20, 101.65, 124.13). The break of falling trend line (147.68, 135.20) was merely a throwover in the last leg. Sustained trading below 108.99 low adds more credence to this case and put key long term support zone of 101.22/65 into focus. On the upside, break of 111.76 resistance is needed to be the first signal that a medium term low is formed. Otherwise, medium term outlook remains bearish.

EUR/JPY

Daily Pivots: (S1) 160.47; (P) 161.36; (R1) 161.89; «www.actionforex.com»

EUR/JPY weakens further to 159.45 today and at this point, further decline is expected to retest 158.67 low as long as 161.68 resistance holds. As discussed before, with EUR/JPY still kept below 164.00/26 cluster resistance (61.8% retracement of 167.62 to 158.67 at 164.26) and struggling to take out 55 days EMA, the case that rise from 149.27 has already completed at 167.72 is in favor. That is, price actions from 168.93 is developing into larger scale consolidation and the last falling leg is in progress. Break of 158.67 will confirm fall from 167.62 has resumed for 61.8% retracement of 149.27 to 167.72 at 156.31 first.

On the upside, above 161.68 will flip intraday bias to the upside and indicate consolidation from 158.67 will extend further. Also, sustained break of 164.00/26 cluster resistance will flip favors back to the case that price action from 167.72 is merely consolidation to rise from 149.27. and will bring retest of this high and then 168.93 key resistance.

In the bigger picture, break of trend line support (137.16, 150.75) confirmed that medium term rally rally from 130.60 has made an important medium term top at 168.93. However, subsequent sharp correction from there to 149.27 was supported by long term rising channel. Hence, long term up trend from 88.97 (00 low) remains intact. But break of 168.93 high is needed to confirm such up trend has resumed. However, sustained break of 149.27 low will also have the long term rising channel taken out, which in turn add much weight to the case that rise from 88.97 has indeed completed at 168.83 and bring much deeper medium term decline.

Forex News Digest

«www.reuters.comFinanceArticle.aspx?type=usDollarRpt&storyID=2007-11-23T092911Z_01_L23569556_RTRIDST_0_MARKETS-FOREX-UPDATE-3.XML»

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«c.moreover.com»
Fri, 23 Nov 2007 07:16:00 GMT from Reuters UK

«c.moreover.com»
Fri, 23 Nov 2007 07:07:00 GMT from Reuters

«c.moreover.com»
Fri, 23 Nov 2007 06:23:00 GMT from People’s Daily Online

«c.moreover.com»
Fri, 23 Nov 2007 06:07:00 GMT from New Zealand Herald

«c.moreover.com»
Fri, 23 Nov 2007 05:59:00 GMT from Financial Times

«www.actionforex.com» Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
07:00 EUR Germany Import price index M/M Oct 0.70% 1.30% 0.60%
07:00 EUR Germany Import price index Y/Y Oct 2.30% 1.90% 1.30%
09:00 EUR Eurozone PMI service Nov 53.7 54.1 55.8
09:00 EUR Eurozone PMI manufacturing Nov 52.6 51 51.5
09:30 GBP U.K. GDP Q/Q Q3 0.70% 0.80% 0.80%
09:30 GBP U.K. GDP Y/Y Q3 3.20% 3.30% 3.30%
Japan Market holiday

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