-Tim Lawless, research director at RP Data
Tony Abbott has claimed his victory for the Coalition during the 2013 federal election. At that time he pledged to introduce immediate reforms that will assure a long-term prosperity. Little has changed since then. The latest polls showed that Abbott's government's approvals rating sank to 36% following the release of the budget. Moreover, Prime Minister's personal satisfaction rating plunged five points to 30%, while his dissatisfaction rating soared to 60%, the highest since September 2012. It seems that the government is losing control, while latest fundamentals are suggesting consumers and companies were hit stronger-than-expected by last month's budget.
His and central bank's hopes were on the housing market, however, they were diminished by the latest figures. Australian dwelling prices fell by most in more than five years, as pledge to introduce spending cuts and more taxes weighed on potential homebuyers. Home values sank 1.9% in May, posting the biggest monthly drop since December 2008, with all major cities but Darwin and Canberra posting declines. Separately, the Bureau of Statistics unveiled the number of building approvals declines 5.6% last month reaching 14.931, posting a surprising fall, as experts were betting on a 1.8% increase. The last but not least, more and more experts start to see a bubble in the housing market, as soon there will be a shortage of supply.
© Dukascopy Bank SA