Invest
What can jobs data tell investors about property?
Property investors are being advised that improving jobs data in a region can be a forward indicator of a strengthening market.
What can jobs data tell investors about property?
Property investors are being advised that improving jobs data in a region can be a forward indicator of a strengthening market.
In seasonally adjusted terms, the Internet Vacancy Index (IVI) increased by 6.4 per cent (or 8,700 job advertisements) in September 2020 to stand at 144,000.
Despite this increase, job advertisements are 12.2 per cent (or 19,900 advertisements) below the level recorded in September 2019.
“It is very close to its trend line between 2014-2015. Between those periods, unemployment was 5.5 to 6.2 per cent,” InvestorKit’s head of research, Arjun Paliwal, said.
“Due to this job index strengthening to this mark, eventually it is a sign of employment improving.”
With Australia showing signs of recovering in the jobs market from the COVID-19 pandemic, Mr Paliwal explained how the strengthening job data could be a positive sign for the property market.
“Employment in isolation is not a driver because you can have strong employment but a lot of properties available.
“However, what employment does is set the cursor for sentiment, which is a key indicator for property growth,” Mr Paliwal said.
While highlighting that a strengthening job market in isolation will not immediately lead to capital growth, Mr Paliwal said investors can use the data as an early indicator of capital growth as jobs and sentiment and eventual housing consumption is linked.
“You could have 10,000 new jobs come into a market, but if there’s a high level of available stock, it is going to be irrelevant.
“The key part is once you’ve identified those markets with balanced or lowering stock levels, when you see the job market improving, that is going to help with sentiment, which will lead to owner-occupiers taking up credit, and that can lead to capital growth,” he explained.
Mr Paliwal said the improving job data, consumer sentiment, lower interest rates and a shortfall of supply all point to an improving property market.
“There are many regions across the country outside of our capital cities that are seeing double-digit increases in the vacancy index, as well as interest rates starting with a one.”
“We are very much on the cusp of a geographic property boom,” Mr Paliwal said.
The researcher is quick to point out that this is a geographic property boom, with the likes of Sydney and Melbourne unlikely to match the pace of growth of some of the regional towns.
“If you look at dwelling and population, Sydney and Melbourne represent close to 40 per cent.
“So, when you look at total properties growing outside of the capitals, it’s 60 per cent.
“So, if investors look at Australia geographically, a big make-up of Australia will be showing price pressure because so many things are coming together for it,” Mr Paliwal concluded.
About the author
About the author
Property
First home buyers brace for strengthening headwinds
While Australian first home buyers dominated the market in 2020, increasing their market share by 50.4 per cent in the past year, they're likely to face strengthening headwinds as prices soar. ...Read more
Property
Australia’s most popular rental suburbs revealed
Tenants should brace themselves for rental price hikes as tightening vacancy rates continue across the country, new research has revealed. ...Read more
Property
Australian home values rise at fastest rate in 17 years
Overall, Australian home values surged 2.1 per cent higher in February, the largest month-on-month change in CoreLogic’s national home value index since August 2003. ...Read more
Property
Housing finance records continue to tumble
Australian housing loan commitment has reached another record high in January, rising by 10.5 per cent in the last month alone, official figures show. ...Read more
Property
Detailed forecast: How will the capital cities perform in 2021?
With most of the property market finding its footing by the end of 2020, after the COVID-induced disruption, experts have grown optimistic about the future of real estate in a post-pandemic world. ...Read more
Property
‘Allowing super to be used for deposit will jack up house prices’
Capital city prices could soar if the backbenchers’ continued push to enable first home buyers to access their super to fund their home deposit is given the green light, a super lobby group has said...Read more
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
Property
First home buyers brace for strengthening headwinds
While Australian first home buyers dominated the market in 2020, increasing their market share by 50.4 per cent in the past year, they're likely to face strengthening headwinds as prices soar. ...Read more
Property
Australia’s most popular rental suburbs revealed
Tenants should brace themselves for rental price hikes as tightening vacancy rates continue across the country, new research has revealed. ...Read more
Property
Australian home values rise at fastest rate in 17 years
Overall, Australian home values surged 2.1 per cent higher in February, the largest month-on-month change in CoreLogic’s national home value index since August 2003. ...Read more
Property
Housing finance records continue to tumble
Australian housing loan commitment has reached another record high in January, rising by 10.5 per cent in the last month alone, official figures show. ...Read more
Property
Detailed forecast: How will the capital cities perform in 2021?
With most of the property market finding its footing by the end of 2020, after the COVID-induced disruption, experts have grown optimistic about the future of real estate in a post-pandemic world. ...Read more
Property
‘Allowing super to be used for deposit will jack up house prices’
Capital city prices could soar if the backbenchers’ continued push to enable first home buyers to access their super to fund their home deposit is given the green light, a super lobby group has said...Read more
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
