How the pillars of the property market are faring

Interesting take by Cameron Kusher for Realestate.com about the foundations of our property market in “A look at what supports the Australian property market amid fears of a collapse”.

1. Employment

New figures from the Australian Bureau of Statistics revealed Australia’s unemployment rate jumped to 7.1% in May from 6.4% in April – its highest level since October 2001.

The JobKeeper wage subsidy is likely contributing to lower participation rates but with the scheme set to expire in three months’ time, unemployment could soon shift higher as people start looking for work again.

2. Population growth

The population increased by 349,833 people in 2019 – its smallest annual increase since the 12 months to December 2015 and its slowest rate of growth since June 2006.

With international borders now closed due to COVID-19, population growth will likely be hampered even further, which will likely lead to reduced overall housing demand in the coming months.

3. Consumer confidence

Consumer confidence fell dramatically as Australia entered COVID-19 lockdowns, but according to the ANZ-Roy Morgan Weekly Consumer Confidence Index, confidence has rebounded significantly since the introduction of the JobKeeper program and mortgage repayment holidays from the banks – now sitting slightly lower than it was before COVID-19 lockdowns began.

This marks a rapid recovery in consumer confidence, especially when you consider how quickly the virus was spreading as the country entered lockdowns.