Everyone wants a map. 
Just a simple guide to what’s going to happen next.
What’s ahead for our economy?
What’s going to happen to wages and unemployment?
Are interest rates going to rise and can property values keep increasing at the strong rates they have been over the last few months?
In search of a map, what most economists and commentators did last year was try and match the current situation, what was happening then at the beginning of the Coronavirus pandemic, to past crises.
Was what was going to be ahead for us going to be like 2008?
Or maybe similar to 9/11?
Was the pandemic going to be like the 1918 Spanish flu pandemic? Or maybe the Great Depression?
So as they looked back, these economists made predictions less than a year ago of plummeting property values, sky-high unemployment, economic Armageddon, and a number of cliffs we’d fall off.
Obviously, none of these things happened and the latest property data, as well as employment and wages statistics released last week, showed how wrong some of these predictions were.
So watch this week’s Property Insider video as I discuss some of this data with Australia’s leading housing economist, Dr. Andrew Wilson, chief economist of My Housing Market, who made some very accurate forecasts last year as he kept reminding us in these weekly videos that we can’t look at history as a guide to predict the future.
Auction clearance rates slipping but still strong
Auction clearance rates remained strong this weekend, but they’re slowly losing steam compared to the white-hot markets before Easter.
All our capital cities delivered strong auction clearance rates with Canberra being the stand-out performer with a preliminary auction clearance rate of 91.2% from the 85 auctions conducted.
Sydney’s hot auction market is now cooling.
Auction clearance rates continue to fall in Sydney and, although results still reflect boom-time conditions, they are now well below the peaks recorded over March
Another big weekend of May auctions continued to test by depth with high auction numbers over the past three weekends clearly contributing to the recent lower clearance rates.
The Lower North and in the west with Sydney’s top-performing regions of the weekend with a clearance rate of 89% and 86.8% respectively.
Melbourne’s auction boom is fading.
Melbourne’s auction clearance rates continue to fall with results for the second consecutive weekend below the boomtime benchmark of 80%.
Melbourne reported a clearance rate of 76.9%, which was the lowest for the year so far with a downward trend now emerging.
High auction numbers are a contributing factor for lower clearance rates with another 1,117 homes auction on Saturday this week.
Another jobless fall makes a complete mockery of the cliff.
Australia’s post-Covid economic recovery remains on track with more positive labour market news over April despite the end of the JobKeeper program.
The ABS reported that the national unemployment rate, seasonally adjusted, fell from 5.6% to 5.5% and is now just above the 5.3% recorded over March 2020.
I remember it wasn’t that long ago that the RBA forecast unemployment rates of this level would take another year to be achieved.
The latest data clearly debunked the widespread recent predictions of Australia falling off an economic “cliff” following the end of the JobKeeper allowances in March precipitating a sharp increase in the unemployment rate.
Similar to the forecast of catastrophic house price crashes and a prolonged and deep economic recession, the “Cliff” has also predictably proven to be just so much silly nonsense and clearly calls into question the competence and credibility of those who provide this type of fear-mongering.
Low post Covid wages creep upwards.
With more Aussies in work than before Covid than wages are now rising slowly, but remain just above the recent record low levels of wages growth as the economy adjusts to the post-Covid policy environment.
The ABS reports that the March quarter Wages Index, seasonally adjusted, increased by 0.6% to be at 1.5% over the year.
The March increase was the same as recorded over the previous quarter and reflects a gradual normalisation to wage settings as JobKeeper income support diminishes.
Although wages are growing again, they remain just above the record low recorded over the previous December and September quarters.
A return to pre-Covid wage increase levels of 2.2% is likely over the coming quarters as the economy continues and demand for labour increases.
Sustained annual wages growth above 3% – last achieved a decade ago – however, remain too remote likelihood with the jobless rate of well below 5% surely a pre-requisite.
from Property UpdateProperty Update https://propertyupdate.com.au/property-news-headlines-forecasts/
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