Some people are calling this the weirdest recession.
We’re in the middle of a pandemic, unemployment is rising, yet our housing markets are remaining resilient.
In fact, there are increasing signs that the modest coronavirus-induced housing correction is coming to an end and that the housing market is on the move again.
Last week I mentioned a palpable change in market sentiment on the ground and that is reflected in strong buyer activity at a time when there is a little good stock on the market.
Consumer and business sentiment have been buoyed by a job-creating budget and the promise of loosening lending criteria next year.
More recently RBA signalled that they were looking at lowering their cash rate even further and reduce the 3-year bond rate.
While the bank’s signal for another cash rate cut to 0.10 per cent on Melbourne Cup day has been seen as adding little extra stimulus, the lock-in of lower rates for longer at a time of relaxed responsible lending rules is expected to reignite the loan market and house prices.
Especially if the RBA reduces the rate it pays commercial banks on money held in so-called exchange settlement accounts with the central bank. Cutting that rate would only further incentivise banks to push harder on lending.
It looks like we’ll have a perfect storm developing for our property markets next year when you also consider the various Federal and State government incentives and proposed spending.
In today’s video Dr. Andrew Wilson, chief economist of My Housing Market, discusses this as well as the latest labour figures and property data.
The weekly ANZ Roy Morgan Consumer Confidence Index rose again to a 20 week high
Sentiment is up 50.2% since using a record low in March (which was its lowest level since 1973.)
The potential future easing of finance, a supportive budget, and the recent affirmation by the RBA of its commitment to supporting jobs, incomes, and businesses in Australia all helped increase business and consumer confidence.
Digging deeper into the Jobs Market:
The job market went backwards again in September.
After creating almost 130,000 jobs in August, employment fell by almost 30,000 places in September, but as you dig deeper, you’ll see Victoria is the culprit.
The jobless rate crept up a notch and they were mixed results across the states and territories.
But the latest jobs data continues to surprise and delight, bettering the expectations of many economists once again.
However, the participation rate, that is the proportion of Australians working or looking for work, remains suppressed at 64.8%.
Watch this week’s Property Insider video as Dr. Andrew Wilson explains the latest jobs figures
The chart below shows the large number of people who returned to work over the last month.
While on the face of it Victoria’s unemployment rate dropped…
The fact is almost 60,000 Victorians dropped out of the workforce last month and are not looking for a job.
Watch this week’s video as DR Andrew Wilson digs deeper into the employment data.
This week’s property data provided by Dr. Andrew Wilson of My Housing Market
Watch our video above as Dr. Andrew Wilson gives his commentary on the following data:
Auction clearance rates remained firm in Sydney last weekend.
At these levels, when close to 80% of properties put to auction sell under the hammer, price growth tends to follow.
Is this the bottom of the Sydney property market?
And Sydney property sales remain strong, reflecting pent up demand.
With Melbourne buyers and agents now allowed to undertake inspections again more properties are being listed for sale in Melbourne, coming from a very low base.
And auctions have returned to Melbourne, even though in very low numbers
Melbourne property sales have surged, reflecting pent up demand.
The Brisbane property market is performing very strongly with more sales last week than any other capital cities.
Newly listed homes for sale:
The markets are picking up and vendors are more comfortable and more homes have come on the market for sale over the last week, particularly in Victoria.
Watch our video as Dr. Andrew Wilson gives his commentary on the following charts.
With property sales out and bring new properties being listed for sale, the total number of properties listed has been dropping. Another sign of the strength of our property markets.
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
If you’re wondering what will happen to property in 2020–2021 you are not alone.
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