Unemployment Up – Home Prices Up – That’s A First

Unemployment Up – Home Prices Up – That’s A First

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You can argue about housing affordability “until the cows come home” however being right is an entirely different matter. Let’s face it Sydney today is a basket case given the grid – locked traffic congestion which simply identifies that it can’t cope as our population surges. This was recently re – enforced with the state government forced to declare that some major roads will now be 24 hour – seven days a week clearways.

With great interest I read this week a report that was released Sydney’s ‘global’ vision bad news for local housing affordability which identified in a recent government briefing paper that in the last decade medium rent for all properties in the inner ring of Sydney more than doubled from A$195 to A$560. Now that’s scary although realistic given the strategy, part of the “Global Sydney” vision from the NSW State government, is almost 10 years old. Updated government forecasts suggest Sydney’s population will grow to 5.8 million by 2031 – approximately 200,000 more people than predicted in 2010.

The report reveals that we can expect little policy movement on private housing subsidies by federal or state governments. Negative gearing has increased the wealth of middle and high income Australians. Developers endlessly lobby governments for taxation concessions. No major political party would dare propose reform.

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SYDNEY AERIAL PHOTOGRAPHY 

With the Reserve Bank of Australia (RBA) deciding to leave the cash rate at 2.50 per cent many were quick to declare RBA turns blind eye to housing boom although I must admit the current state of the property market has everyone baffled and requiring deeper investigation. The question that dominates the market is why so few listings if the market is this strong? Well that is now easier to address given Roy Morgan unemployment hits 11.3% – highest in 19 years. I (like many others) use the Roy Morgan methodology over the Australian Bureau of Statistics (ABS) given it’s absurd and totally unreasonable to consider somebody who works just one hour a week as being in full employment. It is also widely acknowledged that politicians much prefer the ABS figures given it makes them look better. Historically, property markets always contract when unemployment is rising as the two – go hand in hand – although at the moment we are witnessing the complete opposite.

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So we were told this week that Australia’s 9.3 million homes have reached a new high Australian homes worth $5tn with the nation’s residences jumping a huge $184 billion in the last three months of 2013. What many find startling is that previously when unemployment is escalating property prices start dropping however this time around home values are rising and so is the unemployment rate.

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The number of houses on the market changed little with just 81 houses on the market. The most startling statistic being there are just 2 houses for sale in Neutral Bay – previously the record low was 4 houses with an all-time high of 22.

MOSMAN – 2088

• Number of houses on the market this time 2013 – 95
• Number of houses on the market last week – 80
• Number of houses on the market this week – 81
• Number of apartments on the market this time 2013 – 80
• Number of apartments on the market last week – 47
• Number of apartments on the market this week – 50

CREMORNE – 2090

• Number of houses on the market this time 2013 – 14
• Number of houses on the market last week – 9
• Number of houses on the market this week – 11
• Number of apartments on the market this time 2013 – 23
• Number of apartments on the market last week – 9
• Number of apartments on the market this week – 16

NEUTRAL BAY – 2089

• Number of houses on the market this time 2013 – 16
• Number of houses on the market last week – 5
•Number of houses on the market this week – 2
• Number of apartments on the market this time 2013 – 35
• Number of apartments on the market last week – 36
• Number of apartments on the market this week – 38

Source: Australian Property Monitors

For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate
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For this week’s opens for inspection
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The cold truth about hot property prices answers many questions given the Australian labour market hasn’t been this weak in over a decade. Investors are driving the values up as they have identified weak infrastructure and escalating rents given our population explosion.

Governments won’t address any of the issues as they are worried about losing voters so to coin an old Australian euphemism – “Bugger you Jack – I’m all right!”

Cheers ^__^

3 Responses to “Unemployment Up – Home Prices Up – That’s A First”

  • Ann says:

    The sooner the 7 x 24 clearways are in the better, with more high density parking along the corridor to help out the shops

  • Robert Simeon says:

    Sound in theory – although Councils have not made any provision/planning for additional parking once the clearways come into effect.

  • Ann says:

    Yes I agree. There need to multi-stores the open air one at Neutral Bay Village, Cremorne need Paraween and Mosman at Raglan.

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