The weirdest recession for our property markets + latest property data | Property Insiders [VIDEO]

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. Hand Drawing A Graph About Real Estate Market Concept Image

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.

Consumer confidence

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.

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

Jobless

The chart below shows the large number of people who returned to work over the last month.

Labour Market

While on the face of it Victoria’s unemployment rate dropped…

Act Economy

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.

Nsw Performs

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: Andrew Wilson

Sydney

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?

Sydney Weekend

And Sydney property sales remain strong, reflecting pent up demand.

Real Time Sales Sydney

Melbourne

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 Weekend

Melbourne property sales have surged, reflecting pent up demand.

Real Time Melbourne

Brisbane

The Brisbane property market is performing very strongly with more sales last week than any other capital cities.

Real Time Brisbane

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.

National Newly Listen

Total Listings

 

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on

Metropole Team

If you’re wondering what will happen to property in 2020–2021 you are not alone.

You can trust the team at Metropole to provide you with direction, guidance, and results.

In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award-winning team at Metropole.

If you’re looking at buying your next home or investment property here’s 4 ways we can help you:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results, and more certainty. Click here to learn more
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  4. Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.
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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 one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au


'The weirdest recession for our property markets + latest property data | Property Insiders [VIDEO]' have 8 comments

    Avatar

    October 16, 2020 Joseph Battaglia

    Michael your optimistic views irrespective of the true underlying data is disconcerting.
    The government is covering up the reality of the situation, throwing money against the wall at all costs (hoping some will stick) and falsely propping up the economy whilst kicking the can down the road. The rhetoric from parties with bias/interest in the real estate market are also contributing to the propaganda that “things are ok and sentiment is up” – whilst reality is different.
    We are not leaders on the world stage, for our real property obsession, in fact we are almost ridiculed that we are a nation that increases their wealth through selling properties to each other increasing the price at each transaction.

    Its fiscally clear, we should allow the reset button to deflate this overvalued bubble and get back to reality. I mean seriously, some of these prices are ridiculous!

    Are we going the way of Japan?
    This QE is just irresponsible on all counts.
    Over $1T in debt for such a small economy… come on, who are we kidding.

    Reply

      Michael Yardney

      October 16, 2020 Michael Yardney

      You are right Joseph, many of our industries are on life support from the government at the moment. And while the property market was being supported by loan deferrals, they seem to be cleaning themselves up nicely. What is the alternative? Do you really want to see businesses go broke and people go hungry? Our government and those around the world have learned how to handle economic downturns. And spending our way out of a downturn is a valid economic argument

      Reply

    Avatar

    October 2, 2020 Dave

    Dear Michael. Your articles are interesting
    and usually very well written . However this one is full of a lot of spelling and sentence construction mistakes that in parts make it hard
    to follow . Take a look at where it says sh-t (Let me know if you need a proof reader ) 😉

    Reply

      Michael Yardney

      October 2, 2020 Michael Yardney

      Thanks for the heads up Dave – you are right lots of errors in this one. As I can talk faster than I can type I usually use voice to text, and it is pretty accurate. But clearly I missed a couple of bad bloopers this time.

      Reply

    Avatar

    July 24, 2020 Martin

    The RBA will print money. And has printed plenty of it already to fight covid-19. It just doesn’t give the money directly to the government. It prints new money and uses it to buy government bonds on the secondary market so that institutions can take a cut as they buy the newly issued bonds from the government So that the government can pay for jobkeeper and Then these institutions onsell them to the RBA for a markup.

    Reply

      Michael Yardney

      July 25, 2020 Michael Yardney

      There has been a lot of discussion recently about Modern Monetary Theory, which suggests central banks should print more money and then give (lend) it to the government, to help pay for it debts.
      This week RBA governor Philip Lowe said that he won’t do that (print extra money) instead the banks should borrow on the open market at the prevailing low interest rates because they can afford it.
      Rather than print more money he gave the Morrison government the green light to increase debt levels and lock in a larger budget deficit to support the economy during its recovery from the virus crisis

      Reply

    Avatar

    June 26, 2020 Alex P.

    While Dr Wilson may say that more sellers entering the market is an expression of confidence, the flip side is that it may be the smart money taking the opportunity to exit while prices are still holding up. If you drill down in the data is there a way to differentiate whether these are investment properties or owner occupied properties being sold and how does that relate to historical data. Second point is that government intervention has done a good job of addressing short term liquidity over the crisis but there have been no measures on a similar scale to address solvency, and solvency is what really matters after the liquidity tap has been turned off.

    Reply

      Michael Yardney

      June 26, 2020 Michael Yardney

      Alex, you are right on both counts.

      Our experience on the ground speaking to buyers, sellers and estate agents, is that there are very few distressed properties coming on the market at present.

      Similarly we do not believe the government is going to pull the rug out from under us in September after he’s gone to such an effort to support the economy and our markets

      Reply


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