There is change in the air – our property markets are showing some promising signs.
And the biggest question buyers and sellers in Sydney and Melbourne are asking is: “Are we there yet?”
In other words, they’re wondering have our property markets hit the market floor and is it time to get back in again?
We’ve also received the much anticipated second interest rate cut, which by the way isn’t good news.
In this month’s Property Insiders market update Dr. Andrew Wilson and I bring you up to date on what’s happening around our property markets.
- This month’s interest rate announcement – the RBA is clearly targeting unemployment. They want to move the unemployment rate down into the low 4’s to soak up the spare capacity in the employment market with the aim of impacting wages growth.
- The Global economic environment. The major story this month has been the trade tensions between the US and China. If they persist they could impacting global GDP but we did see some positive moves recently with a downgrading of the tensions.
- The Domestic economy – including
- GDP – we saw the March quarter GDP figure — growth for the March quarter of 0.4%, which meant that the annual pace of growth in the economy has dropped from 2.4% down to 1.8%.
- The unemployment rate in May was steady at 5.2%.
- There were 42,300 jobs created — the strongest monthly jobs growth in the past 12 months – 39,800 new part-time jobs were created, whereas only 2,400 jobs full-time.
- The participation rate rose to 66%, which is the highest it’s ever been in terms of people looking to get employment.
- The Wilson Asking Price Index – There are mixed signs this month with asking prices improving in Sydney – but falling elsewhere
- Auction clearance rates
Nationally our property markets are likely to bottom out in the next few months and property values are likely to be a little higher at the end of the year than they are today.
While servicing a mortgage may become a little easier, the introduction of the Banking Code of Conduct and the expansion of Comprehensive Credit Reporting from the beginning of July means the scrutiny on loan applications will remain significantly greater than it has been in the past.
Given this, don’t expect a significant bounce in property values – the recovery in housing market conditions is likely to be slow and gradual.
Links and Resources:
To see the graphs mentioned in this show click here: July 2019 Housing Market Commentary | PROPERTY INSIDERS VIDEO
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