Oxford Economics

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UK-based advisory firm Oxford Economics has acquired a controlling stake in leading Australian analytics and forecasting firm BIS Shrapnel for an undisclosed sum, which the former says will make it the largest independent economics research firm in the world. 
The new organisation will be named BIS Oxford Economics and will see the merger of BIS Shrapnel  with the Australian arm of Oxford Economics. BIS Shrapnel generally focuses on the building, construction, property and mining sectors.
“This investment by Oxford Economics sees the merging of BIS Shrapnel’s deep knowledge of the Australian and New Zealand economies with Oxford Economics’ detailed understanding of the global economy,” said Robert Mellor, managing director, BIS Oxford Economics.
The new firm will be better able to assess market trends and quantify the impacts for its clients at the global, national and city levels, said a media release.
“The acquisition brings together Oxford Economics’ rigorous global modelling and analytical framework with BIS Shrapnel’ expertise across the Australian economy, in particular in forecasting investment cycles,” said Adrian Cooper, chief executive officer and chief economist, Oxford Economics.
“This agreement expands the Oxford Economics Group to more than 300 staff globally, making it the largest independent economics research firm in the world, and allows us to support our clients in understanding economic trends and their impacts both domestically and globally.”
Highlighting this, Mellor added that “major political, social and economic events in nations abroad have profound global impacts – look no further than Brexit or Trump”.
The new entity will operate from BIS Shrapnel’s existing offices in Australia. Robert Mellor will lead BIS Oxford Economics, with Dr Frank Gelber to remain Chief Economist and Director.
All of BIS Shrapnel's staff will be retained.
 
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Oxford Economics buys controlling stake in forecaster BIS Shrapnel

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Australia's housing is among the four riskiest markets in the world, according to Oxford Economics.
It has a strong prospect of falling prices posing a threat to economic activity, the research paper noted
The housing market dangers were "especially acute" in Sweden, Australia, Canada and Hong Kong, according to Oxford.
Weighing up a range of risk factors, including housing valuations compared to long-term averages, it noted all four valuations were very elevated.
It noted there has been a lengthy housing boom, debt levels were high and there was a significant share of floating rate debt, Oxford's lead economist Adam Slater wrote in a research note.
The risks were relatively limited in key markets including the US, Germany, France, China and Japan.
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Overall edian OECD house price valuations are below the 2006-07 peak but are higher for the risky markets, according to Oxford.
<div id="article-inline-ad">"Historical experience suggests that high valuations – of 125 per cent or more of the long-term average – point to a 60 per cent chance of prices falling over the next five years," Mr Slater wrote.</div>
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<div>"This matters because house prices can have a big impact on economic activity, even if the link may have loosened in the G7 in recent years.</div>
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"Looking across a range of housing risk indicators, property market dangers look concentrated in a number of smaller advanced economies and are less severe for the largest economies."
On a valuation index where the long-term average is 100, Australian housing is at 160, while Sweden is at 165, Canada at 173 and Hong Kong at 203.
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<div>Slater wrote rising rates are not strictly necessary for prices to start falling (i.e. Sweden) and in the context of high valuations and debt, even modest increases (i.e. Canada and Hong Kong) "could be a problem."</div>
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<div>Oxford's assessment suggest Australian house prices have another risk factor, with an 82 per cent share of its mortgages held on floating rates.</div>
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Australia's housing among the four riskiest markets in the world, Oxford Economics

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GUEST OBSERVATION
China’s rise as a <a href="https://theconversation.com/soft-power-goes-hard-chinas-economic-interest-in-the-pacific-comes-with-strings-attached-103765" target="_blank">global power</a> is driving new flows of people, ideas and capital between China and Australia. Australian cities need to adapt to this new geopolitical reality.
For some, these changes promise new opportunities to fulfil a “<a href="http://www.defence.gov.au/whitepaper/2013/docs/australia_in_the_asian_century_white_paper.pdf" target="_blank">vision of being a land of increased opportunity, prosperity and fairness</a>”. Others see Asian “invasion” and “takeover” as a threat to Australia’s white identity and <a href="https://www.propertyobserver.com.au/https://www.hardiegrant.com/au/publishing/bookfinder/book/silent-invasion-by-clive-hamilton/9781743794807" target="_blank">political system</a>.
A new <a href="https://doi.org/10.1111/1745-5871.12311" target="_blank">collection of articles</a> demonstrates that the impact of the Asian Century on Australian cities defies both dystopian claims of a “Chinese takeover” and utopian visions of a harmonious urban multiculturalism.
<audio width="300" height="32" preload="metadata" controls="controls" data-duration="850" data-image="" data-title="Linda Jakobson, CEO of China Matters, on Australia's relationship with China." data-size="34018889" data-source="City Road Podcast" data-source-url="https://soundcloud.com/user-283789701/china_matters" data-license="CC BY" data-license-url="http://creativecommons.org/licenses/by/4.0/"><source src="https://cdn.theconversation.com/audio/1327/china-matters-interview.mp3" type="audio/mpeg"></source></audio>
<div class="audio-player-caption">Linda Jakobson, CEO of China Matters, on Australia’s relationship with China. <a class="source" href="https://soundcloud.com/user-283789701/china_matters" target="_blank" rel="nofollow">City Road Podcast</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>32.4 MB <a href="https://cdn.theconversation.com/audio/1327/china-matters-interview.mp3" target="_blank">(download)</a>
</div>
Changing settlement patterns
The profile of migrants who arrived from mainland China since 2000 <a href="https://onlinelibrary.wiley.com/doi/10.1111/1745-5871.12293" target="_blank">is changing</a>. They are more highly skilled, educated and investment-focused than earlier migrants.
Their settlement patterns in Australia <a href="https://onlinelibrary.wiley.com/doi/10.1111/1745-5871.12293" target="_blank">are also changing</a>. Sydney is still home to half of all China-born migrants in Australia. However, the proportion of migrants settling in other capital cities is increasing.
In Sydney in 2001, China-born residents represented over 10% of the population of only three suburbs. A decade later, the number of such suburbs had risen to 22.
Smaller increases were evident in Melbourne (from one suburb in 2001 to seven in 2011) and Brisbane (zero to four).
However, Hurstville was the only Australian suburb in 2011 where China-born residents represented over 25% of the population.
This suggests a pattern of settlement that is neither extreme residential segregation along ethnic lines nor full <a href="https://onlinelibrary.wiley.com/doi/10.1111/1745-5871.12293" target="_blank">“spatial assimilation”</a>. Rather, it is best understood in terms of multiple moderate concentrations.
Changing homes
The choices Chinese migrants make about their homes in Australia are significant in shaping Australian cities.
The homes Chinese migrants make in Australia involve complex relations with both their past homes in China and their new lives as Australians.
Over time, many adopt Australian practices of housing consumption. This includes <a href="https://books.google.com.au/books/about/Migration_Settlement_and_the_Concepts_of?id=Fv79oAEACAAJ&amp;redir_esc=y" target="_blank">the preference for detached suburban houses rather than apartments</a>.
One environmental implication of this is that the housing footprint of China-born migrants in Melbourne increased <a href="https://theconversation.com/chinese-migrants-and-urban-consumption-in-australia-local-impacts-and-global-implications-103921" target="_blank">five-fold after migration</a>.
Nevertheless, Chinese migrants are <a href="https://theconversation.com/higher-density-and-diversity-apartments-are-australia-at-its-most-multicultural-97176" target="_blank">over-represented in apartment buildings</a>. Nationally, only 7% of Australian-born people live in apartments, compared to 31% of those born in northeast Asia, including China.
Changing cultural relations
Despite the policy shift from White Australia to multiculturalism, racism remains prevalent in Australian cities. A narrative about <a href="https://www.tandfonline.com/doi/full/10.1080/07256868.2018.1459516" target="_blank">white victimhood</a> is often used to counter evidence of discrimination against non-whites.
One recent <a href="https://theconversation.com/asians-out-not-in-this-suburb-not-in-this-apartment-103919" target="_blank">study</a> found Asian Australians have experienced twice as many instances of racism and discrimination as have other Australians. Specifically, 58% of Asia-born participants experienced some measure of discrimination when renting or buying a house.
Apartment buildings have become a <a href="https://onlinelibrary.wiley.com/doi/10.1111/1745-5871.12282" target="_blank">key site</a> of <a href="https://link.springer.com/chapter/10.1057/9780230244474_2" target="_blank">intercultural encounter</a>. Often this involves tensions over the <a href="https://theconversation.com/higher-density-and-diversity-apartments-are-australia-at-its-most-multicultural-97176" target="_blank">management of common areas, washing hung on balconies, or even cooking smells in buildings </a>.
Consequently, strata or body-corporate committees have become important institutions for mediating intercultural relations in Australian cities.
In suburbs with increased concentrations of China-born residents, intercultural tensions are often expressed through local urban planning conflicts. In some suburbs, for example, white residents have <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1745-5871.12268" target="_blank">blamed Chinese investors</a> for driving residential densification and the loss of “neighbourhood character”.
At the same time, shared interests in relation to buildings, neighbourhoods and shared social class identities can <a href="https://www.propertyobserver.com.au/https://www.palgrave.com/gp/book/9789811313660" target="_blank">help to bridge ethnic and racial difference</a>.
Housing market
<a href="https://www.tandfonline.com/doi/abs/10.1080/00049182.2017.1317050" target="_blank">Chinese investment </a>in residential and commercial real estate increased from A$2.4 billion in 2009-10 to A$24.3 billion in 2014-15. China was one of the largest sources of capital. Asian foreign investors accounted for 9.4% of purchases of new dwellings in New South Wales in the fourth quarter of 2015.
While much of this investment was channelled into new housing supply, <a href="https://onlinelibrary-wiley-com.ezp.lib.unimelb.edu.au/doi/10.1111/1745-5871.12280" target="_blank">public concern about the impact of foreign investment on housing affordability</a> is rising.
<a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/abac.12110" target="_blank">One estimate</a> suggests that if foreign investment had been held steady from 2004 to 2014, house prices in Sydney and Melbourne would have risen by about 50% compared with the actual growth of 67%. Therefore, most of the increase in house prices cannot be attributed to foreign investment.
By pointing to foreign investment as the main reason for Australia’s housing affordability woes, media coverage and government statements have often shifted attention away from the <a href="https://theconversation.com/affordable-housing-policy-failure-still-being-fuelled-by-flawed-analysis-92993" target="_blank">structural causes</a> of housing unaffordability and the various drivers of <a href="https://www.tandfonline.com/doi/abs/10.1080/19491247.2016.1270618" target="_blank">foreign investment</a>.
Changing Australian cities in the Asian Century
Australian cities in the early 21st century face major challenges relating to housing, transport, jobs and food security.
Racialised talk of “Asian invasion” blames Chinese migrants and investors for many problems. Yet the foundations of these problems run deep into Australia’s <a href="https://www.rowmaninternational.com/book/the_geopolitics_of_real_estate/3-156-775f5a7c-6f6f-45fe-9a2a-fdfaf44f5727" target="_blank">urban histories</a> and our market-driven approach to city-making.
Debate about the impact of the so-called Asian Century on Australian cities must move beyond a discussion about utopian opportunities and dystopian threats. The reality on the ground in Australian cities is far more complex than this binary thinking.<img src="https://counter.theconversation.com/content/103917/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Dallas Rogers, Program Director, Master of Urbanism. School of Architecture, Design and Planning, University of Sydney
Ilan Wiesel, Senior Lecturer in Urban Geography, University of Melbourne
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/how-australian-cities-are-adapting-to-the-asian-century-103917" target="_blank">original article</a>.
Main photo: More than 25% of Hurstville residents were born in China, but the Sydney suburb is the exception to the rule. <a href="https://www.propertyobserver.com.au/https://www.flickr.com/photos/philipterrygraham/36115452672" target="_blank">Philip Terry Graham/Flickr</a>, <a href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC</a> <a href="https://theconversation.com/profiles/dallas-rogers-5269"> </a>
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