Earn
Will rising unemployment threaten the housing market?
Sydney’s and Melbourne’s surge in property prices is under threat from higher unemployment, a leading economist has warned.
Will rising unemployment threaten the housing market?
Sydney’s and Melbourne’s surge in property prices is under threat from higher unemployment, a leading economist has warned.

According to AMP capital’s Dr Shane Oliver, unemployment will be critical to the outlook for housing.
If it picks up significantly in response to slow economic growth, then it will be a big constraint on house prices and could result in forced property sales and another leg down in property prices.
“A sharp rise in unemployment is not our base case but is the key downside risk in terms of the property outlook. But we do see weak economic growth and an [upward] drift in unemployment ultimately constraining property prices gains.”
Australian capital city dwelling prices rose 2 per cent in November, according to CoreLogic, their strongest monthly increase since September 2003. After a 10.2 per cent decline over 21 months, average prices have now had their fifth rise in a row.

Sydney dwelling prices surged 2.7 per cent and Melbourne prices rose another 2.2 per cent, the sixth gain in a row for both cities.
Mr Oliver said Sydney prices have now risen 8.2 per cent from their May low and have recovered 46.5 per cent of the fall since their 2017 high.
“Melbourne prices have now risen 8.3 per cent from their May low and have now recovered 66.6 per cent of the fall since their 2017 high,” he said.
“Our base case remains that after an initial bounce, house price gains will be more constrained than what we saw through the 2012-17 property price boom. Compared to past recovery cycles, household debt-to-income ratios are much higher, bank lending standards are much tighter, there are still more units to hit the Sydney and Melbourne property markets, and unemployment is likely to drift up as overall economic growth remains weak,” the chief economist concluded.
About the author

About the author


Salary
The financial benefits of a diversified income stream
In today’s volatile economic environment, relying solely on a single source of income can be risky. Diversifying your income streams can provide financial stability, reduce the risk of financial ...Read more

Salary
Despite losing top spot, Elon Musk rakes in $400,000 hourly
Elon Musk, the entrepreneur known for his involvement in a wide range of innovative and technological businesses, has recently been dethroned as the wealthiest individual in the world, with Bernard ...Read more

Salary
Rising unemployment and skill shortages prompt Australian businesses to look globally for talent
Australia has witnessed its unemployment rate surging above 4% for the first time in two years, revealed by the latest Labour Force data. Read more

Salary
New findings link job mobility hurdles to stagnant wage growth
Recent research from the e61 Institute has unearthed significant links between slow wage growth in Australia and obstacles to job mobility, including non-compete clauses, complicated occupational ...Read more

Salary
Employers scrambling to prevent workplace brain drain
As workplace managers face a swiftly evolving employment market that’s increasingly favouring the demands of white-collar employees and jobseekers, bosses are falling under mounting pressure to ...Read more

Salary
Unions back Albanese’s pledge to close gender pay gap
An electoral promise from Labor to make gender pay equity an objective of the Fair Work Act has been hailed as a “watershed moment” from industry peak bodies who have traditionally advocated for ...Read more

Salary
Coles asked to disprove $115m in alleged wage theft
One of Australia’s biggest supermarkets faces allegations that it underpaid more than 7,500 employees a total of $115 million. Read more

Salary
Gen Z left behind in progress to gender equality
Women under 25 may emerge from the pandemic in a worse financial position than when it began, new research has shown. Read more

Salary
The financial benefits of a diversified income stream
In today’s volatile economic environment, relying solely on a single source of income can be risky. Diversifying your income streams can provide financial stability, reduce the risk of financial ...Read more

Salary
Despite losing top spot, Elon Musk rakes in $400,000 hourly
Elon Musk, the entrepreneur known for his involvement in a wide range of innovative and technological businesses, has recently been dethroned as the wealthiest individual in the world, with Bernard ...Read more

Salary
Rising unemployment and skill shortages prompt Australian businesses to look globally for talent
Australia has witnessed its unemployment rate surging above 4% for the first time in two years, revealed by the latest Labour Force data. Read more

Salary
New findings link job mobility hurdles to stagnant wage growth
Recent research from the e61 Institute has unearthed significant links between slow wage growth in Australia and obstacles to job mobility, including non-compete clauses, complicated occupational ...Read more

Salary
Employers scrambling to prevent workplace brain drain
As workplace managers face a swiftly evolving employment market that’s increasingly favouring the demands of white-collar employees and jobseekers, bosses are falling under mounting pressure to ...Read more

Salary
Unions back Albanese’s pledge to close gender pay gap
An electoral promise from Labor to make gender pay equity an objective of the Fair Work Act has been hailed as a “watershed moment” from industry peak bodies who have traditionally advocated for ...Read more

Salary
Coles asked to disprove $115m in alleged wage theft
One of Australia’s biggest supermarkets faces allegations that it underpaid more than 7,500 employees a total of $115 million. Read more

Salary
Gen Z left behind in progress to gender equality
Women under 25 may emerge from the pandemic in a worse financial position than when it began, new research has shown. Read more