Money: Australia's economy is dangerously reliant on just two states and their property markets right now - - PressFrom - Australia
  •   
  •   

MoneyAustralia's economy is dangerously reliant on just two states and their property markets right now

03:50  19 july  2019
03:50  19 july  2019 Source:   businessinsider.com.au

Australian dollar set for fifth day of losses, focus on U.S. rates outlook

Australian dollar set for fifth day of losses, focus on U.S. rates outlook Australian dollar set for fifth day of losses, focus on U.S. rates outlook

Australia's economy is dangerously reliant on just two states and their property markets right now© Getty Photo: Getty Images

The Australian economy finds itself in a sticky situation at present, the latest jobs figures show.

They showed just 500 jobs were created across the country in the month of June -- just a fraction of the expected 9,000-10,000. In isolation however, that's not cause for alarm, according to Commonwealth Bank of Australia (CBA) senior economist Gareth Aird, as the creation of more than 21,100 full-time jobs offset the disappearance of around the same number of part-time ones.

"The June employment report was underwhelming, but not surprising given the big lift in employment over May that might have picked up an election impact -- i.e. the recruitment of temporary workers by the Australian Electoral Commission to conduct the Federal election held on 18 May," Aird said in a CBA note on the figures.

'Urgent' construction industry threats could derail economy, insiders warn

'Urgent' construction industry threats could derail economy, insiders warn Business groups fear Australia's construction industry could "grind to a halt", unless there are "urgent" reforms. Five groups including Master Builders Australia and the Australia Industry Group have written to federal Industry Minister Karen Andrews pushing for uniform regulations, fearing the economy could suffer unless action is taken. It comes a month after evacuations of three Sydney towers over safety concerns, and fears over combustible cladding at buildings across Victoria. require(["inlineoutstreamAd", "c.

That kept the jobless rate steady at 5.2%. Just as significantly, however, the growth in full-time work will help allay a growing concern of economists and the Reserve Bank of Australia (RBA).

"The underemployment rate, which the RBA is increasingly referring to, dipped by a solid 0.4 points to 8.2% -- (that's) good news," Airth said.

More full-time workers tend to earn more and spend more, helping grow the economy as a result, but it's in the breakdown of which states are hiring and which aren't that the picture begins to look less rosy.

New South Wales and Victoria have long been the country's largest two employers by a long shot but their economies are beginning to slow.

"One of the interesting things about the Australian economy right now is that so much growth is concentrated in New South Wales and Victoria, primarily in Sydney and Melbourne. The other states are doing quite poorly. One of the concerns I have is if the Sydney and Melbourne labour markets slow down, who fills that gap?" Callam Pickering, Asia-Pacific economist for jobs site Indeed, told Business Insider Australia.

New auction data a mixed bag for Aussie property market

New auction data a mixed bag for Aussie property market Auction clearance rates across the country have hit their highest level for over a year however far fewer homes are going under the hammer, according to new data . Almost 60 per cent of homes up for auction in the powerhouse markets of Melbourne and Sydney in the June quarter sold, figures from CoreLogic showed. Over the three months to June, the clearance rate across combined capital cities came in at 55.5 per cent over 18,104 auctions. But despite clearance rates improving, the number of homes up for auction was down a whopping 30 per cent on the June 2018 quarter, when more than 25,000 homes went under the hammer.

"If conditions slow in these states, perhaps due to housing, then the overall labour market picture would deteriorate rather quickly."

Certainly, a decline in both the Sydney and Melbourne property markets has been apparent. That's a weight on consumer confidence, leading to more penny pinching by households, at the same time that construction slows.

The latest jobs figures showed some signs, albeit small ones, of that deterioration. In Victoria, the unemployment rate rose to 4.8%, while New South Wales' remained steady despite the disappearance of more than 17,000 jobs.

Despite mining states enjoying something of a boom spurred on by commodity prices, they're simply not a good alternative when it comes to doing the heavy lifting.

"The mining sector is doing quite well but it's not a big employer. The main benefits from the mining sector is that income it generates spills over into other sectors in Western Australia and Queensland. That could help support those markets but the Sydney and Melbourne are so big by comparison that if they start to struggle from a labour standpoint, it's hard to see how the other states could offset that," Pickering said.

Adelaide, Brisbane property prices set to rise by 2022, according to new report

Adelaide, Brisbane property prices set to rise by 2022, according to new report A new reports predicts Adelaide will experience "goldilocks conditions" in the property market over the next three years, following Brisbane which is tipped for a 20 per cent increase.

That leaves the national economy in a quagmire. While unemployment remains steady at 5.2% for now, it's up sharply from 4.8% just a few months ago.

As construction slows in New South Wales and Victoria, there may be less to stop it rising further, according to AMP Capital chief economist Shane Oliver.

That's a worry for all Australians, no matter where they live.

Read more

State by state: A July update on Australia’s property markets.
This month, almost everyone involved in property has noticed a marked change in consumer confidence, buyer enquiries and general interest. Most property economists believe the worst of the housing downturn is over, with a stabilisation of the Sydney and Melbourne real estate markets, and property-price falls now levelling off elsewhere. Melbourne and Sydney enjoy the strongest economic conditions in Australia, and despite being the two most unaffordable markets, are the only locations which so far to have shown green shoots. require(["inlineoutstreamAd", "c.

—   Share news in the SOC. Networks

Topical videos:

usr: 1
This is interesting!