- March 20, 2019
- Posted by: Rogers Property Group
- Category: Australian Property Market, International Property Market, Latest News
I have been quite surprised lately when a few novice and first time investors have asked me about my thoughts on the “property crisis”. I am quite surprised to hear this because there is no property crisis. As investors we need to be very careful about what press we are listening to and what we take on board. Just because a journalist or reporter who has no experience in the property market and likely owns no property, writes their opinion, is that now fact? People in general are so easily influenced by traditional media and now social media they are really being led like sheep. When assessing what is happening to not only the economy but property values, you need to look at the facts, not media hype.
The CEO of AV Jennings Peter Summers recently took a shot at the media blaming them for sensationalist reporting that had a negative impact on people’s views. “Much of this media reflects extreme examples or views,” he said adding that it remains a fact that market fundamentals remain sound and, in some areas, strong.
The media needs to understand that there is no “Australian Property Market” It is a number of submarkets that act independently of each other. For example: In the years from 2010 to 2016 the Sydney and Melbourne markets boomed and doubled in value through that period. But I’ll bet if you went to Perth at that time and started telling everyone how great the property market was in that period you may have gotten slapped. Through that period was a tough time for Perth and it still is. The markets act independently and you need to be aware of that.
I have also heard people mention that Australia is heading towards recession. What a load of nonsense. How can we be moving towards recession when we have record levels of employment? In January 2019 “The trend employment to population ratio, which shows how employed the population is, rose to a 10 year high of 62.4 per cent.” ABS latest statistics release.
In January 2019, trend monthly employment increased by 24,900 persons. Full-time employment increased by 16,800 persons and part-time employment increased by 8,100 persons.
Over the past year, trend employment increased by 295,500 persons (2.4 per cent) which was above the average annual growth over the past 20 years (2.0 per cent).
The trend employment to population ratio, which shows how employed the population is, rose to a 10 year high of 62.4 per cent.
“The 15-64 year old employment to population ratio reached a historical high of 74.1 per cent, with almost three of every four ‘working age’ Australians now employed”, Mr Hockman said.
I think people need to put this in perspective. Yes, Sydney and Melbourne have slowed down and are in slight decline. They may have declined by 5 – 10% from their highest point. Is this a crisis? Not at all! Especially when you consider that these markets have doubled in value in the previous 6 years. Also there are other markets in Australia that are doing well. Brisbane being the best of those at the moment.