Unemployment will limit future price growth: CBRE
Unemployment will limit future property price growth, according to CBRE.
Population growth, stock scarcity and strong rental conditions in most cities will provide stability, but unemployment needs to be kept under control to ensure capital growth, according to , CBRE’s Sam Reilly.
“GDP growth and forecasts are trending down in the short term and jobs and income growth is commensurately soft,” Reilly says.
“We believe that broad based growth in job markets is still fundamental for a sustained recovery in residential capital values and at this point an improvement in the economy is not expected until the second half of next year.”
In Perth a slowdown in resources spending is expected to impact the market. In Adelaide sales volumes and capital growth are gradually improving though the employment outlook is hindered by a struggling manufacturing sector. And in Canberra there are significant challenges due to the expected contraction of the public service.
CBRE’s Tom Edwards says improvement in sales volumes was most apparent in the lower price brackets where there was improved affordability.
“The higher volume of stock that is expected to come to the market over Q3 and Q4 will provide the most accurate illustration of the strength of the residential market,” Edwards says.
“While auction clearance rates are currently quite high, we will have a more complete view of the market when buyers have greater choice than what is currently available.”
