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
How to buy house and land packages in Australia
If you’re planning to buy a house and land package, it can be tricky if you’re not familiar with the ins and outs of such deals. Here’s our guide to make this purchase easier for you. ...Read more
Property
How first home buyers can take advantage of the budget
While the 2021 budget included a number of measures relevant to property investors, an expert has questioned whether any of them could yield an impact on rising buyer imbalances and reduced liveabilit...Read more
Property
First home buyers at the frontline of Frydenberg’s charm offensive
There are few surprises to be found in this year’s federal budget, with Australian property investors and first home buyers set to benefit from new and expanded measures. ...Read more
Property
May could be the beginning of the end for housing pricing boom
Experts have suggested that recent growth in prices could mark the peak of the pandemic bounceback for the housing market. ...Read more
Property
Treasurer announces home loan assistance packages for single parents
The federal government has announced a new scheme targeted at helping single parents with limited deposits into the housing market. ...Read more
Property
Australian housing market now valued at $8 trillion
The Australian dwelling market has reached a new record high, with the total value of residential real estate breaking the $8 trillion mark for the first time. ...Read more
Property
A generation of Aussies could be locked out of the housing market as prices boom
A booming property market is set to see a generation of younger Australians priced out of the market, a shadow assistant minister has said, challenging the narrative that younger people are failing...Read more
Property
Is the property market reaching its summit?
While home values continued to rise across the country in April, current trends are pointing to the possibility that the property market has peaked, a new report has revealed. ...Read more
Has the property market reached its peak; Biden’s climate summit and our sharemarket, and the upcoming budget
Listen now
Is the market overheating; should ETFs take your fancy, and what’s happening to the low and middle income tax offset?
Listen now
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Property
How to buy house and land packages in Australia
If you’re planning to buy a house and land package, it can be tricky if you’re not familiar with the ins and outs of such deals. Here’s our guide to make this purchase easier for you. ...Read more
Property
How first home buyers can take advantage of the budget
While the 2021 budget included a number of measures relevant to property investors, an expert has questioned whether any of them could yield an impact on rising buyer imbalances and reduced liveabilit...Read more
Property
First home buyers at the frontline of Frydenberg’s charm offensive
There are few surprises to be found in this year’s federal budget, with Australian property investors and first home buyers set to benefit from new and expanded measures. ...Read more
Property
May could be the beginning of the end for housing pricing boom
Experts have suggested that recent growth in prices could mark the peak of the pandemic bounceback for the housing market. ...Read more
Property
Treasurer announces home loan assistance packages for single parents
The federal government has announced a new scheme targeted at helping single parents with limited deposits into the housing market. ...Read more
Property
Australian housing market now valued at $8 trillion
The Australian dwelling market has reached a new record high, with the total value of residential real estate breaking the $8 trillion mark for the first time. ...Read more
Property
A generation of Aussies could be locked out of the housing market as prices boom
A booming property market is set to see a generation of younger Australians priced out of the market, a shadow assistant minister has said, challenging the narrative that younger people are failing...Read more
Property
Is the property market reaching its summit?
While home values continued to rise across the country in April, current trends are pointing to the possibility that the property market has peaked, a new report has revealed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
