Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Unemployment

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EXPERT OBSERVER
Strong jobs growth over the last year has helped drive down both unemployment and under-employment, however over 2 million Australians are still looking for work or looking for more work
Our data shows real unemployment and under-employment is at 2.17 million in September, representing 15.7% of the workforce. This marks a significant improvement over the last year with the measure declining 2.1% points following strong full-time jobs growth.
However, despite these positive signs, real unemployment and under-employment has now marked four straight years above 2 million, stretching back to September 2015 (1.99 million – 15.6%).
The interest rate cuts in June and July as well as significant income tax cuts legislated in recent months appear to have stabilised the economy after a rough start to 2019. The RBA’s decision to cut interest rates to a record low of only 0.75% in October will also provide additional stimulus.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/10/15/Roy%20Morgan%20underemployment.jpg" alt="">
It’s also worth noting the RBA doesn’t have much room for further interest rate cuts in the remainder of this year and heading into 2020. There are several candidates to increase economic uncertainty in the next few months include the US-China trade war, a messy Brexit ‘divorce deal’ between the UK and the EU or even a risk of conflict in the Middle East.
If any of these were to escalate over the next year, the RBA, as well as the Federal Government, would have to consider more unconventional means to ensure the Australian economy keeps growing and providing jobs for an increasing population.  
Michele Levine is the CEO of Roy Morgan.
Roy Morgan employment series September highlights
In September 1.2 million Australians were unemployed (8.7% of the workforce) with an additional 970,000 (7.0%) now under-employed.
- The workforce, which comprises employed Australians and those who are unemployed and looking for work, has increased year-on-year by 416,000 to 13,836,000. The increasing workforce was driven entirely by an increase in full-time employment as unemployment and part-time employment fell;
- Employment was up 470,000 to 12,634,000 in September 2019 – the rise in employment was driven by a significant increase in full-time employment of 773,000 to 8,467,000. However, over the past year part-time employment has declined by 303,000 to 4,167,000;
- Unemployment was down 54,000 on a year ago to 1,202,000 Australians and the unemployment rate is down by 0.7% to 8.7%. In addition under-employment is down by 155,000 to 972,000 Australians (down 1.4% to 7% of the workforce) over the past year which includes Australians working part-time and looking for more work;
- Roy Morgan’s unemployment figure of 8.7% for August is higher than the <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=FcQ5do3Mtm%2F2JnP%2FxXFcY%2BL9mOkU%2Fad4G7kfqxVfSdkEEq1vNf2gyySaRFEPQL1%2Bi9ipkiUFRCKm00AkHYvGhrLiJHyUZ39UtsXT8roOnEVDSeYCVw9OJsMaR7qoClmuQ7FnqRmFIc4%3D&amp;G=0&amp;R=http%3A%2F%2Fabs.gov.au%2FAUSSTATS%2Fabs%40.nsf%2Fmf%2F6202.0%3Fopendocument&amp;I=20191015051433.0000007b2c8f%40mail6-41-usnbn1&amp;X=MHwxMDQ2NzU4OjVkYTU1MDBkYTM0NmMyNzhmNzA2MTM0Yzs%3D&amp;S=2jyKXPgq0a5bJjyFUSJjaEuGst94S_XP0LIhm9ZcBTo" target="_blank">current ABS estimate for August 2019 of 5.3%</a>, although the gap between the two measures is closer than usual. Roy Morgan’s under-employment estimate of 7% is now slightly below the current <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=FcQ5do3Mtm%2F2JnP%2FxXFcY%2BL9mOkU%2Fad4G7kfqxVfSdkEEq1vNf2gyySaRFEPQL1%2Bi9ipkiUFRCKm00AkHYvGhrLiJHyUZ39UtsXT8roOnEVDSeYCVw9OJsMaR7qoClmuQ7FnqRmFIc4%3D&amp;G=0&amp;R=http%3A%2F%2Fwww.abs.gov.au%2Fausstats%2Fabs%40.nsf%2Fmf%2F6202.0%3Fopendocument%26ref%3DHPKI&amp;I=20191015051433.0000007b2c8f%40mail6-41-usnbn1&amp;X=MHwxMDQ2NzU4OjVkYTU1MDBkYTM0NmMyNzhmNzA2MTM0Yzs%3D&amp;S=K2aAgJimDljPFdUm4K9Tzu-E-I2U2LeVVHjAVLbQK5Y" target="_blank">ABS under-employment estimate of 8.6%</a>;
- Roy Morgan’s total unemployment and under-employment of 2,174,000 Australians (15.7% of the workforce) in September, down 209,000 on a year ago, is larger than figures usually proffered, but the biennial ABS survey the ‘<a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=FcQ5do3Mtm%2F2JnP%2FxXFcY%2BL9mOkU%2Fad4G7kfqxVfSdkEEq1vNf2gyySaRFEPQL1%2Bi9ipkiUFRCKm00AkHYvGhrLiJHyUZ39UtsXT8roOnEVDSeYCVw9OJsMaR7qoClmuQ7FnqRmFIc4%3D&amp;G=0&amp;R=https%3A%2F%2Fwww.abs.gov.au%2Fausstats%2Fabs%40.nsf%2Fmf%2F6239.0&amp;I=20191015051433.0000007b2c8f%40mail6-41-usnbn1&amp;X=MHwxMDQ2NzU4OjVkYTU1MDBkYTM0NmMyNzhmNzA2MTM0Yzs%3D&amp;S=VJo-K5kqz77QZOCYbmpq7jLLG35UQYMJf8Bh1cULqb8" target="_blank">Barriers and Incentives to Labour Force Participation</a>’ last released in 2017 claims a much higher figure of 2.7 million Australians would like a job or to work more hours – including 1.1 million people the ABS said wanted a job but are excluded from the Labour Force.
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jrobinson-rf4aSBido9

Real unemployment and under-employment stuck above two million: Roy Morgan

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The seasonally adjusted unemployment rate dropped from 5.3 per cent to 5.2 per cent in September, according to figures released today by the ABS.
Seasonally adjusted employment increased by 14,700 people to 12,944,000.
The underlying composition of the net change was an increase of 26,200 people in full-time employment and a decrease of 11,400 people in part-time employment. 
Since September 2018, full-time employment increased by 191,700 people, while part-time employment increased by 119,900 people.
Australia's trend unemployment rate however remained at 5.3 per cent, in line with economic forecasts.
Alex Joiner, economist at IFM, says the positive figures might buy the RBA some time if the third quarter CPI doesn't disappoint later this month.
New South Wales saw its unemployment rate tick up from 4.3 per cent to 4.5 per cent, while Victoria's dropped from 4.9 per cent to 4.7 per cent.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/10/17/September%20unemployment.jpg" alt="">
The biggest mover in September was South Australia, whose soaring unemployment rate dropped from 7.3 per cent to 6.3 per cent.
Over the past year, trend employment increased by about 300,000 people (2.4 per cent), which continued to be above the average annual growth over the past 20 years (two per cent).
Full-time employment increased by 2.1 per cent and part-time employment increased by 2.9 per cent over the past year.
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RBA breathe sigh of relief as seasonally adjusted unemployment nudges lower

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GUEST OBSERVATION
In all Australia’s capital cities, average share-house rents in the inner suburbs (where <a href="https://theconversation.com/rapid-growth-is-widening-melbournes-social-and-economic-divide-117244" target="_blank">jobs are concentrated</a>) leave people without enough money for food and other basics, new research shows.
This research, for a forthcoming report by the authors, proves there is a rental housing crisis for people on Newstart (and other low-income earners) everywhere in Australia.
The analysis was based on Real Estate Institute of Australia (REIA) <a href="https://reia.asn.au/product-category/individual-data-purchase/" target="_blank">data</a>, using common indicators such as housing affordability and stress. Housing stress for people on low incomes is <a href="https://www.ahuri.edu.au/policy/ahuri-briefs/3040-indicator#targetText=The%20'30'%20in%20the%2030,to%20be%20in%20housing%20stress." target="_blank">defined</a> as when rent costs more than 30% of their income.
For example, the dataset for Victoria (the third-most-expensive rental market and broadly representative of the nation) shows rent for a share house in Melbourne averages 70% of income for a single person receiving <a href="https://www.humanservices.gov.au/individuals/services/centrelink/newstart-allowance/how-much-you-can-get" target="_blank">Newstart</a> (A$277.50 per week) and <a href="https://www.humanservices.gov.au/individuals/services/centrelink/rent-assistance" target="_blank">Commonwealth Rent Assistance</a> (A$45.74 per week). This leaves people with A$98 a week to live on. That’s less than half the <a href="http://unsworks.unsw.edu.au/fapi/datastream/unsworks:46141/binaaacbcf3-915f-40bc-a70f-2052746ab643?view=true" target="_blank">A$216 a week</a> that experts calculate is a healthy base level of income for a single unemployed person.
After paying rent, people on Newstart have just A$14 a day to cover food, utilities and the costs of job seeking such as mobile phone plans and travel cards (<a href="https://www.ptv.vic.gov.au/tickets/fares/metropolitan-fares/" target="_blank">A$4.40 a day in Melbourne</a>).
<a href="https://images.theconversation.com/files/292976/original/file-20190918-187957-hzokjt.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/292976/original/file-20190918-187957-hzokjt.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Author analysis based on REIV data, Author provided
While it was assumed rent for people on low incomes eats up much of their benefits, this analysis shows just how bad the situation has become in all capital cities. It is worst in Sydney. As the chart below shows, median weekly rent in Sydney is A$550, which when split between two renters amounts to A$275 each. This leaves a renter on Newstart with the princely sum of just A$48.24 a week – A$6.89 a day – to live on.
<a href="https://images.theconversation.com/files/293088/original/file-20190918-187991-14slgpp.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/293088/original/file-20190918-187991-14slgpp.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Affordable rent points compared to median rents in capital cities. Author analysis using REIV data, Author provided
What about living in cheaper areas?
Another worrying aspect of the data is it suggests high rents are compelling people on Newstart payments to relocate from inner cities to the outer suburbs and satellite towns with worse labour markets and higher transport costs. And even in these towns, the data paint a bleak picture.
In Victorian regional cities like Bendigo and Ballarat the rent for sharers exceeds the commonly accepted 30% benchmark for housing stress. Here they would be paying A$130 a week – almost half their Newstart payments. With Rent Assistance, that would leave them with A$192 – still A$24 less than the healthy benchmark.
There are only two regions in all of Australia where single unemployed people would have any hope of meeting rents. These are northern Tasmania and outer Hobart, where the <a href="https://www.rdatasmania.org.au/news/tasmania-ranks-high-in-youth-unemployment-hotspots/" target="_blank">youth unemployment rate is 16%</a>. You can add about another <a href="http://bilbo.economicoutlook.net/blog/?p=22954" target="_blank">10 points to the unemployment rate</a> to get a real sense of the challenges of getting jobs in these places.
<a href="https://images.theconversation.com/files/293089/original/file-20190918-187935-wq63n8.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/293089/original/file-20190918-187935-wq63n8.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Affordable rent points compared to median rents for regions. Author analysis using REIV data, Author provided
Benefit increases are essential
So what is affordable for people on Newstart? For single people receiving Newstart and <a href="https://www.humanservices.gov.au/individuals/services/centrelink/rent-assistance" target="_blank">Rent Assistance</a>, share-house rents would have to be A$87.
While the table below shows A$97, that would be the affordable rent if maximum Rent Assistance were paid. But it does not actually kick in until <a href="https://www.humanservices.gov.au/individuals/services/centrelink/rent-assistance/eligibility-payment-rates/how-much-you-can-get" target="_blank">weekly rent exceeds A$61</a>. So low-rent places do not attract as much of a subsidy from Rent Assistance as higher-rent properties.
This points to the need for Rent Assistance to kick in at a lower income point. It also needs to be increased to avoid housing stress.
<a href="https://images.theconversation.com/files/293091/original/file-20190918-187985-ykep1q.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/293091/original/file-20190918-187985-ykep1q.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Author provided
The federal government’s response to this kind of evidence always relies on an argument that Newstart is intended as a <a href="https://www.financeminister.gov.au/transcript/2019/07/22/abc-radio-%E2%80%93-am" target="_blank">“transitional” payment</a>. The unemployed are told they should “<a href="https://www.theguardian.com/australia-news/2019/jul/29/unfunded-empathy-scott-morrison-pushes-back-on-growing-calls-to-lift-newstart-rate" target="_blank">get a job</a>”.
But it is very clear this is not as easy as it sounds. That is because there are increasing numbers of people on Newstart <a href="https://www.theage.com.au/politics/federal/200-000-australians-with-a-disability-struggling-to-get-by-on-newstart-report-20190916-p52rt6" target="_blank">with disabilities</a> and <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2018-09-25/mature-workers-on-newstart/10195296" target="_blank">over 55 years old</a> – the majority of <a href="https://theconversation.com/are-most-people-on-the-newstart-unemployment-benefit-for-a-short-or-long-time-120826" target="_blank">long-term unemployed</a> are now mature-age job seekers.
There are also <a href="https://theconversation.com/these-job-snob-claims-dont-match-the-evidence-121429" target="_blank">far more applicants than job vacancies</a>. It’s worse in regional areas where there are fewer jobs to begin with.
Many welfare agencies are preparing submissions to a <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/Newstartrelatedpayments" target="_blank">Senate inquiry</a> into Newstart and related payments in time for the September 30 deadline. These submissions are expected to contain even more compelling analysis showing it is impossible to survive on Newstart.
The Australian Council of Social Service (<a href="https://www.acoss.org.au/about-us/" target="_blank">ACOSS</a>) and several other agencies are demanding that <a href="https://raisetherate.org.au/" target="_blank">Newstart be raised by at least A$75 a week</a>. Even this badly needed increase will not fully alleviate housing stress, which is the <a href="https://www.acoss.org.au/housing-homelessness/" target="_blank">main cause of homelessness among low-income people</a>.
Simone Casey, Research Associate, Future Social Service Institute, RMIT University
Liss Ralston, Urban Statistician, Centre for Urban Transitions, Swinburne University of Technology
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/city-share-house-rents-eat-up-most-of-newstart-leaving-less-than-100-a-week-to-live-on-123772" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

City share-house rents eat up most of Newstart, leaving less than $100 a week to live on

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EXPERT OBSERVER
The robust update on employment continues but with strong growth in working age population, and rising participation, it is not enough to prevent a rise in unemployment. Participation hit a new record high of 66.2 with the unemployment rate drifting up to 5.3% from 5.2%. Underemployment is also moving higher, 8.56% from 8.42% in July and back to on par with May 2019 which was the recent high. 
Westpac is forecasting the unemployment rate to continue to rise from here, on the back of a soft patch in employment, to 5.4% by end 2019 but given unemployment is now 5.3%, this is no longer a big call. 
In the year to August, the largest share of employment gains have been for full-time females (3.1%yr), male full-time employment (1.9%yr) has grown slower than total employment (2.5%yr), suggesting employment gains remain focused in the services industries that are rich in female employment. We get an industry update on employment next week. 
Rising unemployment in this update gives us some comfort that the RBA is on track to cut rates at the October Board meeting. The RBA has also given more attention to underemployment, than just unemployment on its own, when thinking about the outlook for wages a further indicator the labour market is moving in the wrong direction. 
The August Labour Force Survey reported a 34.7k gain in employment. As we head through the third quarter of the year, growth in employment remains quite robust with a three month average gain of 24k in August, almost unchanged from 25.9k in July and only slightly down from 31.9k in May.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/EmpAug2019.JPG" alt=""> 
Back in May the survey reported a strong +40.4k gain in employment with participation surging to 66.0%, boosting the labour force and therefore holding unemployment flat at 5.2% despite the very strong gain in employment. Since then, while there has been some month to month volatility in employment, the trend remains robust and yet the unemployment has drifted up to 5.3%.
Why is this so? A combination of robust working age population growth and, perhaps more importantly, participation rising to new record high.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/AugLFUnempPart.JPG" alt="">
In the year to July, employment has grown 311.0k or 2.5%. The pace of employment growth has eased back from 2.8%yr in May but it is still stronger than the 2.2%yr at the end of 2018, while the six month annualised pace has lifted to 2.6%yr from 2.3%yr in July. Our Jobs Index suggests employment should be growing around 2.3%yr currently before slowing to 2.0%yr by year end.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/AUgLF6mthAnn.JPG" alt="">
In August, unemployment rounded up to 5.3% but given that at two decimal places it was 5.25% from 5.24% in July we think it is better to describe it as being flat. Nevertheless given the robust gains in employment this is still a disappointing outcome.
In August participation hit a new record high of 66.2% (66.15% at two decimal places from 66.06% in July) resulting in a solid 38.8k gain in the labour force. We had expected that a soft employment print associated with flat participation would have driven a rise in unemployment but given the ongoing strength in population growth, it seems that employment growth can remain sound but not robust enough to bring down, or even hold, unemployment.
Today’s update is further confirmation that we are observing a robust upward trend in participation in both NSW and Victoria and while participation has eased a little in NSW, since the May record high of 66.2%; participation in Victoria hit a new record high of 66.2%.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/FemPArtRateAug209.JPG" alt="">
Back in June we were surprised by the drop in underemployment (those employed who are willing and able to work more hours) which fell 0.4ppts to 8.2%.
Underemployment did not improve as much as unemployment through 2018 and in early 2019 had been trending higher compared to the unemployment rate.
So we were not surprised that in July underemployment bumped back up to 8.4% and in August it rose again to 8.6%. Rising underemployment is a further sign that that labour market continues to underperform and that excess capacity is rising in the economy.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/AugLFUnderemp.JPG" alt="">
Justin Smirk is ‎senior economist at the Westpac Group.
This article was <a href="https://westpaciq.westpac.com.au/Article/40323/14186/" target="_blank">first published on Westpac IQ</a>.
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Robust employment not enough to prevent rising unemployment: Westpac

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GUEST OBSERVATION
Legend has it that, when asked by US President Richard Nixon in 1972 what he thought about the impact of the French Revolution, Chinese Premier Zhou En Lai replied: “it’s too early to say”.
Waiting for progress on wages and unemployment in Australia may not be a multi-century enterprise (the French Revolution was in 1789) but Reserve Bank Governor Philip Lowe’s <a href="https://rba.gov.au/speeches/2019/sp-gov-2019-08-09" target="_blank">testimony</a> to the House of Representatives Standing Committee on Economics on Friday was reminiscent of Zhou’s caution:
"In the central scenario that I have sketched today, inflation will be below the target band for some time to come and the unemployment rate will remain above the level we estimate to be consistent with full employment.
"While this remains the case, the possibility of lower interest rates will remain on the table. The board is prepared to ease monetary policy further if there is additional accumulation of evidence that this is needed to achieve our goals of full employment and inflation consistent with the target. Time will tell."
That was a week ago, but since then “<a href="https://youtu.be/VhkmB5OzvQ0" target="_blank">old man time</a>” has given us two less than completely encouraging pieces of information.
Wage growth isn’t really climbing
On Wednesday the Bureau of Statistics released the June quarter <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6345.0" target="_blank">Wage Price Index</a> which showed wages rising 0.6% for the quarter and 2.3% on the year.
It provides two things to worry about.
First, wage growth isn’t rising. Annual growth has remained unchanged for three quarters.
<a href="https://images.theconversation.com/files/288130/original/file-20190815-136208-8bizez.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/288130/original/file-20190815-136208-8bizez.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6345.0" target="_blank">ABS 6345.0</a>
Second, the growth that is there is driven more by the public sector (0.8% over the quarter) than the private sector (0.5%).
As the Bureau’s chief economist Bruce Hockman puts it:
"Wage growth continues at a steady rate in the Australian economy on the back of strong public sector growth over the quarter. The most significant contribution to wage growth this quarter came from the public sector component of the health care and social assistance industry, where a number of large increases were recorded in Victoria under a plan to ensure wage parity with other states"
Things might improve when and if the Reserve Bank interest rate cuts of June 5 and July 2 start changing the way consumers and employers think.
But the Reserve Bank cash rate has been at a record low of 1.5% since September 2016. All through those three years Governor Lowe has told us to be patient, that soon wage growth will climb and unemployment will fall.
We’ve had little progress on wages, and since January none on unemployment.
Unemployment isn’t really falling
On Thursday the bureau followed up with the latest <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0" target="_blank">unemployment figures</a>.
Although job creation was strong in July – 24,600 jobs were added to the economy, 15,100 of which were full-time – the trend unemployment rate ticked up to 5.3%, from 5.2%.
The “trend” is a smoothed out extension of the way the way the Bureau of Statistics algorithm thinks the rate is going.
<a href="https://images.theconversation.com/files/288128/original/file-20190815-136186-f1ybgp.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/288128/original/file-20190815-136186-f1ybgp.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0" target="_blank">ABS 6202.0</a>
In part it is going up because more people not previously regarded as unemployed are looking for work (and not finding it).
It isn’t necessarily a bad thing, but it is also exactly what would be expected when wage growth was sluggish. Households are doing what they can to assemble more income.
The world economy is in trouble
Global economic conditions are concerning. This week Europe’s second-biggest economy <a href="https://www.destatis.de/EN/Press/2019/08/PE19_304_811" target="_blank">Germany</a> announced that its economy shrank by 0.1% in the second quarter of 2019, putting it on track to meet what some people call the technical definition of a recession.
Figures out of China regarding industrial production were also worrying, with factory output climbing more slowly than at any time in the last 17 years.
The US stock market climbed 1.5% on Tuesday after the Trump administration announced it would delay some of its new tariffs on China, but slid twice that amount the next day on the news from Germany and China.
The fall in stocks led to a flight to the relative safety of government bonds. This caused the yield on 10 year US government bonds to fall below that of the 2 year bonds, a so-called “inverted yield curve” of the kind usually seen before a recession. The last time the US yield curve inverted was before the US Great Recession of 2008.
None of this is good for Australia. With roughly 20% of our economy powered by exports, we need the countries we export to to be doing well.
As Reserve Bank deputy governor Guy Debelle put it in a <a href="https://rba.gov.au/speeches/2019/sp-dg-2019-08-15" target="_blank">speech</a> on Thursday:
"Australia also has significant exports to China in both tourism and education. To date, these have been broadly unaffected by the slowdown in the Chinese economy. But a further significant slowing in the Chinese economy and household incomes would clearly pose a risk."
There’s no telling how low rates will go
There have been plenty of <a href="https://theconversation.com/no-surplus-no-share-market-growth-no-lift-in-wage-growth-economic-survey-points-to-bleaker-times-post-election-110315" target="_blank">competing views</a> about the state of the Australian economy over the past few years.
Not long ago most economists who thought interest rates would move <a href="https://theconversation.com/no-surplus-no-share-market-growth-no-lift-in-wage-growth-economic-survey-points-to-bleaker-times-post-election-110315" target="_blank">thought they would rise</a>. The Reserve Bank governor suggested the same.
But its increasingly clear that <a href="https://www.afr.com/policy/big-project-spending-a-good-way-to-kickstart-stagnant-economy-20150819-gj2i7v" target="_blank">secular stagnation</a> is gripping advanced economies around the world. In response, the US Federal Reserve has recommenced cutting rates and markets predict it will cut <a href="https://rba.gov.au/speeches/2019/sp-ag-2019-08-13" target="_blank">another full percentage point</a> by this time next year.
Markets also expect the European Central Bank, Bank of Japan, and the Reserve Bank to cut rates significantly.
The Bank’s “<a href="https://theconversation.com/rba-update-governor-lowe-points-to-even-lower-rates-121690" target="_blank">house position</a>” on unemployment is that we can go down to 4.5% before worrying about triggering inflation (not that there’s much sign of that happening).
Another way to say that is that unemployment has to reverse course and get down to a barely-precedented 4.5% before there’s much hope of the Reserve Bank meeting the inflation target it is meant to be aiming for.
Perhaps the most important question facing the Australian economy is how aggressively the bank will act to attempt to get it there and to keep the economy afloat. Time will tell.
Richard Holden, Professor of Economics, UNSW.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/vital-signs-amid-talk-of-recessions-our-progress-on-wages-and-unemployment-is-almost-non-existent-121813" target="_blank">original article</a>.
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Amid talk of recessions, our progress on wages and unemployment is almost non-existent

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Unemployment ticked slightly higher in July, but remained steady on a seasonally adjusted basis, firm over July, according to the latest figures form the ABS.
The unemployment rate was predicted to remain unchanged at 5.2 percent in July, seasonally adjusted, with an increase of around 14,000 jobs tipped.
In trend estimates however, unemployment rose to 5.3 percent.
There were 41,100 jobs added over the month.
Full time employment increased by 34,500, with part time employment rising 6,700.
IFM Investors economist Alex Joiner said employment growth was strong with the amount of jobs added over the month. There had been just 500 jobs added in June.
"The unemployment rate tracked sideways at 5.2% despite rising participation, potentially giving the RBA another month to assess the data," Joiner said. 
To enlarge, <a href="https://www.propertyobserver.com.au/images/2019/8/15/Unemployment%20by%20state.jpg" target="_blank">click here</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/15/Unemployment%20by%20state.jpg" alt="">
South Australia now has the highest unemployment rate in the country, seasonally adjusted at 6.9 percent.
Unemployment declined in New South Wales, Queensland and Tasmania.  
ABS chief economist Bruce Hockman said Australia's trend unemployment rate increased to 5.3 per cent in July 2019, the same level as this time last year. "The trend participation rate increased further to 66.1 per cent, while employment growth continues to show strength," Hockman added.
Former RBA economist Callam Pickering says Australia still has a two speed labour market.
"Unemployment rate in NSW (4.5%) and VIC (4.8%) much better than in other parts of the country. SA (6.3%), QLD (6.4%) and TAS (6.7%) particularly troubling," he said.
Over the past year, trend employment increased by 339,200 persons (2.7 percent) which was above the average annual growth over the past 20 years (2.0 percent).
Australia doesn't come close to making it into the top 16 countries for unemployment rate.
South Africa has an unemployment rate of nearly 30 percent, while Portugal, who are 16th on the list, have 6.8% of the population unemployed.
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Unemployment ticks higher in July, but remains steady seasonally adjusted

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EXPERT OBSERVER
The RBA remained on hold at a record low cash rate of 1% at its August board meeting as widely expected. This followed 0.25% rate cuts in June and July.
The Bank’s post meeting statement was dovish:
<ul type="disc">
<li>referring to the downside risks to global growth from the trade war;</li>
<li>revising down yet again its GDP growth forecast to around 2.5% for this year (from 2.75%);</li>
<li>noting that wages growth remains subdued with little upwards pressure; and</li>
<li>indicating that inflation will take longer than earlier expected to reach 2%.</li>
</ul>
The final paragraph repeated Governor Lowe’s recently used forward guidance to expect an “extended period of low interest rates” and noted that the Board stands ready to ease monetary policy again if needed, indicating that the Bank retains an easing bias.
For now the RBA is in wait and see mode – basically waiting to see what sort of boost to growth the rate cuts of June and July and the Federal Government’s tax cuts for low and middle income earners provide.  Baring a shock to the economy this is likely to remain the case for a few months.
However, while the rate cuts seen so far and the Federal Government’s tax cuts will help, we see unemployment drifting up to around 5.5% by year end in contrast to the RBA’s expectation for a fall to around 5% over the next couple of years. The stimulus to date won’t be enough to get wages growth up and inflation back to target and so we expect the RBA to resume cutting rate later this year with 0.25% cuts in each of November and February.
Help from more fiscal stimulus and structural reforms is needed but this will take time to come through and impact the economy so the pressure remains on the RBA in the short term. And the escalating US/China trade war adds to this pressure to the extent that it threatens demand for Australian exports and business confidence locally.
DR SHANE OLIVER is the Head of Investment Strategy and Chief Economist at AMP Capital.
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soliver-smf6LQXgW9

RBA on hold but expect cash rate of 0.5% by February 2020

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EXPERT OBSERVER
An expected soft update but a robust trend in participation is making it very hard to see unemployment getting below 5% any time soon, let alone getting down the RBA’s natural rate of 4.5%. Westpac is forecasting the unemployment rate to rise from here.
The June Labour Force Survey reported a 500 gain in employment. So far this year employment has been quite robust with a three month average gain of 29.2k in June from 35.8k in May and 24.45k in April.
The trend in employment remains on par with the three month average gain of 31.2k in January.
The May survey reported a strong 45.3k gain in employment (revised from 42.3k) with participation surging to a new record high of 66.0% boosting the labour force and lifting unemployment to 5.2%.
As such, we had thought there was a high risk of a statistical correction this month which is why we forecast a modest 10k rise in employment. The market median was 9k.
<a href="https://www.propertyobserver.com.au/images/2019/7/18/unemployment%201.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/18/unemployment%201.jpg" alt="">
 
In the year to June, employment has grown 296.3k or 2.4%.
The pace of employment growth has eased back from 2.9% in May but it is still stronger than the 2.2% at the end of 2018.
Our Jobs Index suggests employment should be growing around 2.4%yr currently before slowing to 2.1% through Q4.
In June, unemployment was flat at 5.2% (5.24% at two decimal places so just a whisker from 5.3% - it was 5.19% in May) and with the participation holding a record high of 66.0% (65.98% at two decimal places from 66.03% in May) the labour force grew just 700.
We had expected that a statistical decline in participation would have seen the unemployment rate fall to 5.1%.
Today’s update is further confirmation of a robust upwards trend in participation particularly in NSW which hit a record high of 66.2% in May.
<a href="https://www.propertyobserver.com.au/images/2019/7/18/unemployment%202.jpg" target="_blank">Click here </a>to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/18/unemployment%202.jpg" alt="">
The big surprise in June was the drop in underemployment (those employed who are willing and able to work more hours) which fell 0.4ppts to 8.2%.
Underemployment did not improve as much as unemployment through 2018 and had recently been trending higher compared to the unemployment rate.
The correction in June has mostly reversed the surprising 0.3ppt jump in April.
In Victoria, the underemployment rate fell 1.5ppt taking that state’s underemployment rate back to 7.9%, more in line with 7.5% in NSW.
We had been surprised by just how high underemployment has been in Vic over the last few months.
<a href="https://www.propertyobserver.com.au/images/2019/7/18/unemployment%203.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/18/unemployment%203.jpg" alt="">
In the last year to June, most of the gains in employment have been full-time (246.5k/2.9%) and the share has been split evenly between males (121k/2.2%) and females (125.5k/4.0%).
As females are growing from a lower base they have a much faster growth rate but it is somewhat surprising that in the year to June, part-time female employment has been broadly flat while male part-time employment has grown at a 4.2% pace over the year. 
<a href="https://www.propertyobserver.com.au/images/2019/7/18/unemployment%204.jpg" target="_blank">Click here</a> to enlarge: 
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/18/unemployment%204.jpg" alt="">
Employment growth has held together so far in 2019 even if it is on a softening trend.
Unemployment and underemployment are drifting higher but the employment to population ratio has held around 62.4% since the end of 2019 highlighting that the rise in unemployment is more about rising participation than weak employment.
<a href="https://www.propertyobserver.com.au/images/2019/7/18/unemployment%205.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/18/unemployment%205.jpg" alt="">
In the year to June, employment has grown 121.9k/3.5% in NSW compared to 126.5k/3.8% gain in Victoria.
Employment grew more modestly in Queensland (27.9k/1.8%) and just 11k/1.7% in South Australia and 20.5k/0.9%yr in Western Australian.
In the year to April unemployment has fallen 0.1ppt in NSW to 4.6% (the national low), –0.8ppt in Victoria to 4.8% and rose 0.6ppt in Queensland at 6.5%.
In which case, Queensland rose to 6.5% from 6.2% in May or 5.8% in June 2018. But this trend is shifting with unemployment up 0.3ppt in the last six months in NSW, 0.6ppt in Victoria with a 0.4ppt rise in Queensland.
Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.
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Unemployment rate set to rise: Westpac's Justin Smirk

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The unemployment rate has remained unchanged at 5.2% according to the recent figures from the ABS.
The figure is in line with market expectations.
The RBA are trying to drive the unemployment rate down to 4.5%, however the RBA believe it needs to below 5% in order for the economy to see adequate wage growth.
The number of unemployed persons edged higher, from 697,000 to 701,700.
The unemployment rate crept up slightly from 5.19% in May to 5.24% in June. It is now at its highest level in 10 months.
The unemployment rate dropped in Perth, however saw a rise in Victoria, Queensland, South Australia and Tasmania.
To see the state by state breakdown, <a href="https://www.propertyobserver.com.au/images/2019/7/18/ABS%20Unemployment%20figures.jpg" target="_blank">click here</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/18/ABS%20Unemployment%20figures.jpg" alt="">
There were forecasts from economists that there would be around another 9,000 jobs added, following on from the increase of 45,300 jobs in May. 
There were only 500 jobs added.
Full time jobs rose by 21,100, but part-time jobs fell by 20,600.
The trend participation rate increased to 66 percent over the month.
ABS Chief Economist Bruce Hockman said, "Australia's participation rate was at 66 per cent in June 2019, which means nearly two of every three people are currently participating in the labour market. " "The participation rate for 15 to 64 year olds was even higher and closer to four out of every five people, " Hockman said.
CommSec economist Ryan Felsman said the Reserve Bank is expected to hold for now.
"The Reserve Bank is expected to ‘sit pat’ for now, assessing incoming economic data over the coming months before deciding the next move for the cash rate," Felsman said.
"But the Board stands ready to act, “if needed” to support the economy and job market. 
"The end-of-month June quarter inflation data release is the next test."
 
  
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Unemployment rate meets forecasts and remains at 5.2%

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EXPERT OBSERVATION
Unemployment fell to a six year low of 5% in September. If you look at the labour market holistically, the large monthly drop looks like survey volatility rather than a new lower trend. Nevertheless, it is our view that the labour market is sound and that unemployment has been trending down.
Westpac forecasts the unemployment rate to hold above 5% to end 2018 before a soft patch in the June quarter 2019 (due to both election uncertainties and correction to the 2017/2018 strong patch) will lift unemployment to 5.3%. Once past the soft patch, steady employment growth will take unemployment back down to 5.0% by end 2019 and 4.8% by end 2020. 
We use business and household surveys to guide our near term employment forecasts while our medium term profile is driven by our fundamental view on household demand, services exports and non-mining investment.
Our participation forecasts are dynamic responding to changes in employment growth. The forecasts are, however, bound by the assumption that participation will not hit a new record high.
Household and business surveys guide the near term
When forecasting the near term pace of employment growth we use the labour market indicators from the household and business sentiment surveys.
From the Westpac-Melbourne Institute Consumer Sentiment Survey there is the question on household unemployment expectations (do they expect unemployment to rise or fall?) which has a good fit with the momentum in the labour market. Unemployment expectations have risen modestly (households expect unemployment to rise a little thus a softening in the labour market) but still holding a historically robust level. However, employment overshot unemployment expectations through the second half of 2017 so an undershoot through to the mid 2019 would be a normal course of events.
The multiple business surveys in Australia have questions that are applicable to the labour market. To generate a broad, deep labour market indicator, Westpac compiles all the relevant indicators from these surveys into the proprietary Westpac Jobs Index from which we generated a simple model of annual employment growth. It is true that the Jobs Index is more stable than the annual pace of employment growth but we have found it provides a useful guide on both the near term pace of employment growth and, more importantly, major turning points. Currently the Jobs Index is pointing to employment growth of 2½%yr. Actual employment growth in the second half of 2017 overshot the jobs index. Looking ahead we expect employment growth to undershoot the job index through to early 2019.
Using these indicators we expect the pace of employment growth to hold around current levels through to the end of the first quarter of 2019. This will see the annual pace dip to around 2% by end 2018 which is softer than what our indicators are suggesting in response to our allowance for some employment undershoot following the 2017 overshoot.
Looking further out household demand and non-mining investment drive our forecasts
<div>Looking further out our fundamental economic view defines our employment profile. There are various indicators you can use to do this, and multiple ways to generate a model, but we have found that simple models based on well understood measures best suit our needs for a 'not-just-reliable' guide but also one that is simple to understand and explain. The two economic fundamentals we use are adjusted household demand (which is household consumption, housing activity – both dwelling construction and renovations – and net services exports) and non-mining business investment.Annual growth in adjusted household demand peaked at 4.4% in the second half of 2015 before slowing to 2.2% in the first quarter of 2018. We have found that the growth in adjusted household demand has a two quarter lead on quarterly growth in employment. Again, as we saw with the near term employment leading indicators, employment growth has outpaced our adjusted household demand model's estimates, stretching from 2017 Q2 to 2018 Q1. As such, our forecasts incorporate a period of employment undershoot before returning to fundamentals in the last quarter of 2018. By end 2018 our model suggests employment should be growing a little more than 20k per month on average.Non-mining investment staged a relatively modest recovery lifting to almost 8%yr in the March quarter from where we are forecasting the pace to flatten to around 0%yr in early 2019. The recent peak is quite modest compared to what was seen back in the late 1990s and the first half of the 2000s when the pace often peaked around 20%yr. Nevertheless, the recent increase does point to a very modest near term lift in employment growth through 2018 before it slows in late 2019. And there is also the issue of the 2016/2017 overshoot. Given the expected correction, we see employment through to the end of the first half of 2019 undershooting the model's estimate (an average monthly gain of around 25k). </div>
Participation has peaked, for now, but will recover as employment recovers
Once you have an employment profile, an estimate of participation is required to round out the forecasts. As readers would be aware, the strong employment growth through 2017/2018 did not lead to a large fall in unemployment as participation lifted from an October 2016 low of 64.4% to a January 2018 high of 65.8%. In the September Labour Force Survey, the fall in the unemployment rate to 5.0% was supported by a sharp 0.24ppt dip in participation to 65.44%. The all time record high in participation was 65.79% in November 2010. It recently hit 65.78% in January 2018.
There are two factors to consider in regards to participation. The structural longer run issue, such as rising female participation, education, aging population etc and the short-run dynamics where participation rises and falls with employment. In the long-run the cross currents of rising female participation and declining male participation (associated with an aging population - for now females are pushing out their age of retirement so the aging population is not a net negative for them) suggests we may have past a medium term peak in participation. Our forecasts focus on the short-run dynamics of participation associated with employment bounded by our view we have seen a structural peak.
A further reason to be cautious about lifting the participation rate back to record peaks is the observation that the recent improvement in male employment has not produced the lift in male participation that it has in the past. In fact while annual growth in male employment has lifted, the annual change in male participation has moderated.  On this basis the participation rate drifts up a little through to the first quarter of 2019, before it drifts down a little as employment slows, limiting the rise in unemployment to 5.3%. Through the second half of 2019 and into 2020, employment lifts to an around trend pace and the participation rate continues to drift higher but remains short of the most recent peak of 65.78%.
Unemployment set to drift down to less than 5% by end 2019 while the rise in employment to population will remain shy of a new record high 
Once you have an employment and participation profile you can generate a profile for the unemployment rate and, as a cross check, an employment to population profile (including population estimates). Our forecasts result in the unemployment rate rising to a peak of 5.3% in the June quarter of 2019 before easing back to 5.0% year end then trending down to 4.8% by end 2020. The employment to population rate dips a little from 62.2% to 62.1% by the June quarter 2019 before entering a trend rise to 62.6% by end 2020. While not returning to the previous peak of 62.9% (August 2008) employment to population rises over this period highlighting that an employment pace of 2% is slightly faster than our current estimate of population growth.
Justin Smirk is a Senior Economist for Westpac
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