Recently we wrote a positive piece suggesting the probable direction of the Australian residential housing market in the next period of time.
Just as there are positives behind the market’s likely upward momentum, there are also negative influences applying a brake.
The market – outside of Sydney – is very much stop-start. It is currently, for mine, best summed up as “two steps forward, one step back”.So, what are some of these brakes? They include:
- Low overall confidence.
- Poor governance.
- Low employment growth.
- Slow wages growth.
- Property market commentary.
The first two are intensely connected. Yet a federal election done & dusted doesn’t mean that we all will become cock-a-hoop on the 8th September – although beating the Springboks on the 7th might help. But there is little doubt in this writer’s mind that a change of government will help.
A majority government would do wonders, but a sympathetic Labor opposition leader would go a long way to reversing some of the overzealous policies of recent years. Listen up Bill! But we are in for a tough haul regardless of outcome, so steel yourselves for some hard terrain ahead.
The latest figures from the Australian statistician suggest that 123,000 new jobs were created across Australia since July last year. One in three new jobs was full-time.
This is not enough, if you ask me.
More full-time jobs need to be created.
Until this happens, more interest rate cuts are on the agenda.
[sam id=34 codes=’true’]We also might be seeing a baton change with regard to where jobs are actually being created. As we discussed a few weeks back, this is important when it comes to residential demand & market momentum.
NSW still is the king pin – with 64,000 new jobs.
Victoria created 24,000 new jobs, too.
But Western Australia is slipping – and with a third of its economic output directly connected to mining, one should expect as much – with 19,000 new jobs. True, this isn’t a figure to be sneezed at, but it is less than it once was – much less, in fact.
South Australia & Tasmania are still losing work. Canberra & NT are treading water.
And that leaves Queensland.
Maybe it is a flash in the pan; maybe the stars aligned against KRudd & Beattie a few weeks back, but the latest seasonally adjusted labour force figures from the Bureau (which are typed out in some crusty old font I might add, just to help exemplify their officialdom), show that 26,000 new jobs were created in the Sunshine State over the last 12 months. And here is the truly amazing part…half of them (okay 46 per cent – I get carried away sometimes) were full-time.
“Go Newman!” one might exclaim. Or was it an anomaly? But staring at page 10 of ABS publication 6202.0 shows me that more jobs – especially full-time ones – have been added every month in Queensland since March this year.
So, maybe things are going to slow down out west; up north; in Canberra & across the Australian Bight? Maybe they will get hotter in NSW, Victoria & Queensland? And before I move on, under ten per cent of Queensland’s economy is about mining.
Wages, too, are growing too slowly. In fact, they are increasing by just 3 per cent per annum. Petrol prices seem to go up by that much on a daily basis.
You have to remember back to when you wore short pants or a pleated skirt to recall such a measly increase in the average pay packet. Well, at least you would have to think back to 2000. It was a long time ago.
Again, this means the RBA should maintain its easing bias.
It is also clear that the Australian economy has changed. Whilst rate cuts are welcome, something much more is needed to correct the health of the domestic economic landscape. I do hope for a new & majority government.
Did you know that eight out of ten Australian households (that have a taxable income) do not – I repeat, do not – own an investment property?
Furthermore, just one in every seven Australian households owns just a single residential investment property. Just 480,000 households own two rental properties (5 per cent), with 162,000 or a paltry 2 per cent of Australian households owning three or more investment homes.
This is a roundabout way of saying that very few people actually buy investment housing in Australia; & even less buy more than one.
But if you go online and read the comments section of almost any investment property-related blog or website, one would think that everyone in Australia owns an investment property.
In fact, some leaving their replies have such strong opinions that they must own a great many of them, so deep are their convictions.
Or that’s what they would have us believe.
I am against censorship – I believe we have the right to think what we want, and within reason, share it with others – but for mine, unless you supply your full name on a blog or website reply, it isn’t worth reading. Sadly, too few apply this benchmark. And far too many are influenced by what they read. And much of what they read is absolute bunkum.
Remember – empty vessels make the most noise.
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