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Macro Economic & Demographic Indicators in 13 Charts |December 2014

Here’s an overview of the major economic and demographic indicators affecting our property markets.

The following charts are part of Core Logic’s December Chart Pack.

Housing demand: population growth starts to ease on lower overseas migration

housing economics 1

Housing supply: dwelling approvals have recently peaked after a solid ramp-up

housing economics 2

Housing supply: approvals have outpaced population growth since 2004

housing economics 3

Consumer sentiment has remained pessimistic for nine consecutive months

housing economics 4

Labour force: part time jobs growth is outpacing full time jobs growth

housing economics 5

Mortgage rates: have now been on hold for 15 consecutive months

housing economics 6

You may also like: Property Market Overview in 9 Graphs which I published yesterday.

You can also read our recent  review of the various property markets with more graphs here:

  1. Sydney property market overview for December 2014
  2. Melbourne property market overview for December 2014
  3. Brisbane property market overview for December 201
  4. Perth property market overview  for December 2014
  5. Adelaide property market overview  for December 2014
  6. Darwin property market overview  for December 2014
  7. Canberra property market overview for December 2014
  8. Hobert property market overview  for December 2014


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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Macro Economic & Demographic Indicators in 13 Charts |December 2014' have 4 comments

  1. Avatar for Property Update

    December 23, 2014 @ 9:56 am Max Powers

    Yeah nice chart pack, but quite frankly, there’s really only one main driver of property prices and that’s the rate of expansion in credit.

    So, maybe as the income shock to australia hits (currently happening) and the rba cut rates close to the zero bound (soon to be happening) like many other central banks have, then you might get a blip in credit expansion (and some more price gains). But once complete, the game will be very different indeed. It will be very difficult for expensive markets such as the capital cities in Australia to post meaningful house gains as the contraction in real incomes just won’t allow for much further leverage. However, and I know this might be unpopular on such a blog however pragmatism is the name of the game, that’s no bad thing since at a macro level, over capitalisation in unproductive assets such as dwellings (particularly owner occupied), while an excellent lifestyle choice, it is in itself a poor financial investment, especially when the rate of change of credit expansion is negative (i.e. the rate of change of the rate of change).

    Many property investors like to claim that its not about the rental yield. Well they are about to find out that when markets trade flat, or indeed trade lower, for 5 or 10 years (and you and I are both old enough and ugly enough to remember the days), you better have a decent rental yield to carry you home and allow you to stay in the game!

    Anyway, keep up the good work.

    Reply

    • Avatar for Property Update

      December 23, 2014 @ 12:29 pm Michael Yardney

      Max
      You make some interesting points and while I’m sure you won’t be surprised if I don’t agree with all of them, I do agree that some investors will get into trouble when interest rates eventually rise.
      While I basically invest for capital growth, I learned the important lesson of watching your cash flow early in the piece.
      cash flow keeps you in the game, but you need capital growth to get out of the rat race

      Reply

      • Avatar for Property Update

        December 23, 2014 @ 11:11 pm Max Powers

        Yep, I agree with you – you do need capital gains. But I guess I am just saying that they might not be as forthcoming as we’d like in the next few years! But hey, trees don’t grow to the sky.

        Reply

        • Avatar for Property Update

          December 23, 2014 @ 11:26 pm Michael Yardney

          Max – you are right – the level of growth we’ve had in Sydney and Melbourne is clearly unsustainable, and those who invest counting on it will get some surprises

          Reply


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