<p>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.</p>

<p>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;</p>

<p>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;</p>

<p>“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;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>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;</p>

<p>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;</p>

<p>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.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>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;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>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.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“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;</p>

<p>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.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>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;</p>

<p>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;</p>

<p>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”.</p>

<p>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;</p>


Joel Robinson

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

<p><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.</p>

<p>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.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“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.”</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“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.”</p>

<p><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" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“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.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“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.”</p>

<p>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.</p>

<p>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.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>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.</p>

<p>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.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“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.</p>

<p>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.</p>

<p>&nbsp;</p>


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

<p>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.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>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.</p>

<p>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.</p>

<p>“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.</p>

<p>“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.”</p>

<p><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" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“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.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><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" /></p>

<p>&nbsp;</p>

<p>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.</p>

<p>Green praised local policy settings.</p>

<p>“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.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


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

<p>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.</p>

<p>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.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"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.</p>

<p data-end="882" data-start="690">"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."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

Unemployment

<html><body>
<p>The latest ABS unemployment figures show the trend unemployment rate is at a six year low.</p>
<p><span>The trend unemployment rate remained steady at 5.2 per cent in the month of September 2018 after the August figure was revised down.</span><br><br><span>"Today's figures continue to show a gradual decrease in the trend unemployment rate that began in late 2014," ABS chief economist Bruce Hockman said.</span></p>
<p><span>"The trend unemployment rate of 5.2 per cent is the lowest it has been since mid 2012."</span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/10/18/abs-unemp.jpg" target="_blank">to enlarge.</a></p>
<p><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/2018/10/18/abs-unemp.jpg" alt=""></p>
<p><span>Over the year, trend employment increased by over 290,000 persons or 2.4 per cent, which was above the average year-on-year growth over the past 20 years (2.0 per cent). </span> </p>
<p><span>Unemployment is down to 4.4% in New South Wales, 4.5% in Victoria and to 6% in Western Australia.</span></p>
<p>Ahead of the unemployment figures the employment segment of the NAB Quarterly Business Survey rose 2.4 points in September.</p>
<p>The jump, from +9.5 points in August to 11.9 point in September, brings the total points to the third highest level in 12 and a half years.</p>
<p>The 12 month moving average of +10 points is a record high.</p>
<p>NAB group chief economist Alan Oster said business conditions have stabilised after a mid-year pullback. </p>
<p><strong><span> </span></strong>“Business conditions have pulled back through the middle of 2018 after reaching very high levels earlier in the year. However, the latest monthly survey suggests that conditions have stabilised at a still high level," Oster said.</p>
<p>"This suggests that momentum in the business sector has not weakened further. Overall, trading conditions, profitability and employment conditions remain quite favourable.”</p>
<p class="x_MsoNormal"><span>Oster noted that despite conditions easing</span> across most industries, generally most industries continue to report above average conditions.</p>
<p class="x_MsoNormal">"Retail however, remains weak, as it has been for some time," Oster noted.</p>
<p class="x_MsoNormal">Roy Morgan's latest data found 246,000 more Australians employed than last year, with unemployment down to 9.4 percent in September off a two-year high.</p>
<p class="x_MsoNormal">"Australian employment has grown solidly over the past year with nearly 200,000 jobs created split evenly between full-time and part-time employment," the market research firm advised.</p>
<p class="x_MsoNormal">There were a total of 12,164,000 Australians employed in September, up 192,000 over the last year.</p>
<p class="x_MsoNormal">The September increase however was split evenly across full time jobs (97,000 created) and part-time jobs (95,000 created).</p>
<p class="x_MsoNormal">Roy Morgan CEO Michele Levine said as a consequence, part-time employment in Australia has hit a new record high of nearly 4.5 million in September.</p>
<p>“In addition to the new jobs created a further 54,000 Australians entering the workforce were unable to find a job and became unemployed," Levine said.</p>
<p>"Now 1.3 million Australians are unemployed in September equivalent to 9.4% of the workforce and up 0.3% on a year ago," Levine said.</p>
<p>Compared to three years ago, there are now 4.1% less Australians in full-time work (63.3%), while part-time employment is up 4.1% (36.7%).</p>
<p>“As we’ve noted previously the persistent high level of unemployment and under-employment in Australia isn’t because jobs aren’t being created, it’s because the workforce continues to grow at a faster rate than the growth in employment," Levine suggested.</p>
<p>"Not only is the expanding Australian workforce not providing enough jobs to reduce unemployment but the long-term trend of an increasing casualisation of the Australian workforce is continuing.</p>
<p>The ANZ-Roy Morgan consumer confidence rating fell by 0.7 percent to 117.3 in the past week.</p>
<p>The index is comfortably above the average of 114.2 held since 2014, and above the longer term average of 113 held since 1990.</p>
<p>CommSec's Ryan Felsman said the hiring spree in Australia continues.</p>
<p>"Labour market conditions are positive, employment growth is solid, the unemployment rate is at six-year lows, job vacancies are elevated and the participation rate has been hovering near record high levels," he said.</p>
<p>"And while home prices have moderated in Greater Sydney and Melbourne, the unemployment rates in both cities are at near ten-year (4.4 per cent) and six-year (5.5 per cent) lows in August."</p>
<p>Felsman said further job gains are anticipated, with the Aussie domestic economic backdrop supportive.</p>
</body></html>

jrobinson-rf4aSBido9

Trend unemployment rate at six year low: ABS

<html><body>
<p>EXPERT OBSERVATION </p>
<p>Job vacancies surged to record highs in both New South Wales (82,400) and Victoria (72,000) last month as those states get set to enjoy an extraordinary hiring boom.</p>
<p>There were broad-based gains across a raft of industries, including professional and technical services, financial and insurance services, healthcare and social assistance, mining, construction, accommodation and food, transport, postal and warehousing, arts and recreational, administrative and support roles, education, and more. </p>
<p>The ongoing resurgence in the mining sector helped to lift job vacancies in Western Australia (27,600) to the highest level in half a decade, while Queensland (35,100) and South Australia (11,900) have improved significantly over the past couple of years. </p>
<p><a href="https://1.bp.blogspot.com/-6geqbjFj3UA/W6yM3FQR4AI/AAAAAAAAsGE/54OOUZjxE14_ja7T2vU30Z1_XN4AB1z4wCLcBGAs/s1600/A2.jpg"><img src="https://1.bp.blogspot.com/-6geqbjFj3UA/W6yM3FQR4AI/AAAAAAAAsGE/54OOUZjxE14_ja7T2vU30Z1_XN4AB1z4wCLcBGAs/s640/A2.jpg" width="640" height="372" data-original-height="804" data-original-width="1376"></a></p>
<p>The Tasmanian economy is also firing, with the Northern Territory potentially the one serious laggard. </p>
<p>The trend in private sector vacancies scorched more than 20% higher over the year, while the trend annual increase in all sectors was 19.3%, taking the total number of vacancies to the highest ever level at 240,900. Goodness!</p>
<p><a href="https://4.bp.blogspot.com/-gdCGqYzu_-I/W6yM3BmmiBI/AAAAAAAAsGI/dMb4fYx8X9srOOEhSXW_JYIocugEDvWIACEwYBhgL/s1600/A1.jpg"><img src="https://4.bp.blogspot.com/-gdCGqYzu_-I/W6yM3BmmiBI/AAAAAAAAsGI/dMb4fYx8X9srOOEhSXW_JYIocugEDvWIACEwYBhgL/s640/A1.jpg" width="640" height="376" data-original-height="801" data-original-width="1357"></a></p>
<p><strong>More hiring ahead</strong></p>
<p>There will be some half-hearted attempts to talk down the result by the Opposition, but the facts don't lie: at under 3% the number of unemployed persons per job vacancy now has a two-handle for the first time since the mining boom...which is surely great to see.</p>
<p><a href="https://1.bp.blogspot.com/-56f7SXAgf4Q/W6yP0fiWpbI/AAAAAAAAsGY/8jK0R-zOCSkuox3KTC6QpuiIIm_IkvujACLcBGAs/s1600/A4.jpg"><img src="https://1.bp.blogspot.com/-56f7SXAgf4Q/W6yP0fiWpbI/AAAAAAAAsGY/8jK0R-zOCSkuox3KTC6QpuiIIm_IkvujACLcBGAs/s640/A4.jpg" width="640" height="384" data-original-height="805" data-original-width="1341"></a></p>
<p>Of course, the labour force has expanded significantly too as discouraged workers come back into the fold alongside record high female participation (the rise in dual income households being an under-appreciated boon for housing markets).</p>
<p>But even accounting for this the figures point to an ongoing decline in the unemployment rate towards 5%, and lower still for New South Wales and Victoria.</p>
<p><a href="https://1.bp.blogspot.com/-RrYk-jXZNc0/W6yM3I7DnPI/AAAAAAAAsGA/aKvYfIpUEkIpVVyiFjZtw7Wub3DVim-DgCLcBGAs/s1600/A3.jpg"><img src="https://1.bp.blogspot.com/-RrYk-jXZNc0/W6yM3I7DnPI/AAAAAAAAsGA/aKvYfIpUEkIpVVyiFjZtw7Wub3DVim-DgCLcBGAs/s640/A3.jpg" width="640" height="370" data-original-height="801" data-original-width="1384"></a></p>
<p><strong>Hirin' now!</strong></p>
<p>Overall, this release was very positive news, with the economy continuing to improve in the two most populated states, and the resources states generally now on the up too.</p>
<p>All this means that Australia has never had as many jobs to be filled as it does right now.</p>
<p>Good stuff.</p>
<hr>
<p>The Hometrack UK 20 Cities House Price Index increased by a further 3.9% over the year to August 2018. </p>
<p>It's been a wild week of bickering for Australian housing market commentary thanks to yet another (now-traditional) <em>60 Minutes </em>beat-up.<br><br> But in the background the fundamentals of the economy quietly continue to improve: exports, tourism, government revenues and the Budget balance, hiring, engineering construction, and so on (resulting in a risk rating upgrade to AAA neutral). </p>
<p>One of the neat things about our mortgage broker liaison is that since brokers take 'snapshots' in time, we can take a mortgage application from today and re-run it against the lending standards of yesteryear.</p>
<p>While the results do vary quite a bit, typically a home buyer applicant might see their borrowing capacity cut by about 10% from where things were a year ago due to tightened lending standards, while for some portfolio investors the equivalent figure can be much greater.<br><br> In fact, many portfolio investors simply won't be able to borrow at all in the present environment. </p>
<p>On its own this probably won't have as big an impact on the housing market as some people think (cf. the United Kingdom, where tighter mortgage lending criteria have failed to stop house prices from rising to fresh highs in nominal terms).</p>
<p>Firstly, that's because home buyers don't always borrow the maximum amount permissible.</p>
<p>And secondly, it's because most investors don't own more than one or two properties - thus portfolio investors are only one small part of the pie, albeit an important one at the margin.<br><br> In fact, the average loan size is still being written at or around record highs, but in lower volumes now.</p>
<p>ANZ updated its somewhat more sober house price forecasts today, expecting prices to decline by just 2% in 2019 - a mere 20-fold improvement on the lame<em> 60 Minutes</em> offering - with a market peak-to-trough fall for Sydney and Melbourne expected of no more than 10%. </p>
<p>ANZ also noted that it was more upbeat for the housing market prospects of Brisbane, Adelaide, and Canberra, as well as many of Australia's regional housing markets. </p>
<p>Looking forward, the sheer strength of the hiring figures makes it hard to disagree with that assessment. </p>
<p><em><strong>PETE WARGENT </strong>is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></p>
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pwargent-M4siyDbqQY

Expect an ongoing decline in the unemployment rate: Pete Wargent

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<div>EXPERT OBSERVER</div>
<div> </div>
<div>Another substantial surge in jobs was reported for June, with total employment up by a seasonally adjusted 50,900 in the month.</div>
<div> </div>
<div>This led to the usual quibbles about whether the figures are 'right' or not. </div>
<div> </div>
<div>This seldom happens when the number are below expectations.</div>
<div> </div>
<div>But when there's a beat...every time!</div>
<div> </div>
<div>There are even occasional calls to ditch the seasonally adjusted figures entirely in favour of the smoother trend data, but I'm not sure I buy that.</div>
<div> </div>
<div>What are the trend figures, after all, but a representation of the same numbers from the survey? </div>
<div> </div>
<div>The further you disaggregate the figures the more prone they are to throwing out unusual results. </div>
<div> </div>
<div>For example, Macquarie highlighted an oddity in that the bulk of jobs growth over the past four months was accounted for by youth employment, especially from the female cohort.</div>
<div> </div>
<div>The detailed labour force figures at the regional level are similarly prone to volatility, which is why the ABS reports annual average figures in addition to the original survey results. </div>
<div> </div>
<div> </div>
<div>For all of the grouching, the labour force has continued to tighten gradually over the past few years. </div>
<div> </div>
<div>For the monthly doubters, the seasonally adjusted unemployment rate has now fallen by more than one percent from 6.38 per cent in October 2014 to 5.37 per cent in June 2018.</div>
<div> </div>
<div>If you prefer to use the trend rate, then that's plotted below for you too. </div>
<div> </div>
<div>The unemployment rate is now at the lowest level since 2012. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-2JWVaIcKwE8/W1MPTWopYJI/AAAAAAAArJk/IQFNOPE6G2YyoZHHpHb87bnv0fECz6rbQCLcBGAs/s640/UE.jpg" width="640" height="376" data-original-height="804" data-original-width="1363"></div>
<p> </p>
<div>Another piece of pessimistic statistical trickery is to highlight the underutilisation rate while neglecting to report the more telling volume measures of underutilisation.</div>
<div> </div>
<div>In other words, yes lots of people want more hours of work, but the numbers of extra hours wanted has been declining over the past four calendar years too. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-sVMjYyerNWg/W1MU3jafYNI/AAAAAAAArJ4/jK4rZLKxv_44Z1qA933gSjo2fI98wB8DACLcBGAs/s640/UU.jpg" width="640" height="376" data-original-height="799" data-original-width="1355"></div>
<p><br><span>This is good news, and it should be embraced as such!</span><br><br><span>Welcome to the recovery.</span></p>
<p><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></p>
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The labour market is improving: Pete Wargent

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<div>I took a look <a href="http://petewargent.blogspot.com/2018/06/unemployment-falls-to-54pc" target="_blank">here</a> at the employment growth figures during the week, which broadly showed that the unemployment rate in Australia is back down to where it was in 2013. </div>
<div> </div>
<div>The number of unemployed persons dropped sharply in the month of May, down by 26,800 to 714,600, taking the unemployment rate down from 5.6 per cent to 5.4 per cent. </div>
<div> </div>
<div>So that's the good news. </div>
<div> </div>
<div>The state making the most substantial inroads lately has been Victoria, with the number of unemployed persons down to 174,400 from 208,500 a year earlier.</div>
<div> </div>
<div>Very good news!</div>
<div> </div>
<div>The unemployment rate in Victoria has declined accordingly to 5.1 per cent, down from 6.1 per cent a year ago.</div>
<div> </div>
<div>So that's getting quite close to the 4.9 per cent of New South Wales. </div>
<div> </div>
<div>Like Sydney before it, Melbourne is enjoying the fruits of its construction boom.</div>
<div> </div>
<div>Some progress, then, but overall there are still more than 700,000 out of work, and there remains plenty of slack in the labour force nationally. </div>
<div> </div>
<div>A look at the trend chart for unemployed persons underscores this point.</div>
<div> </div>
<div>In October 2014 the two most populous states had a combined 442,900 unemployed persons, a figure that's since fallen by about 60,000 or 14 per cent. </div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-wxFOA13nJc8/WyQxuec63KI/AAAAAAAAqkg/-i5Ua9cfvEAOpAUXxC42-sr0pzY3aOaDACLcBGAs/s640/A1.jpg" width="640" height="366" data-original-height="804" data-original-width="1400"></div>
<p> </p>
<div>Elsewhere, however, in aggregate there's been little meaningful progress. </div>
<div> </div>
<div>With regards to underemployment, the the trend rate declined to 8.5 per cent in May 2017, which is a bit below peak of 8.7 per cent seen in 2017. </div>
<div> </div>
<div>Meanwhile, the underutilisation rate also declined by 0.4 per cent to 13.9 per cent over the past year. </div>
<div> </div>
<div>Just about enough evidence here to suggest an ongoing improvement.</div>
<div> </div>
<div>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</div>
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Like Sydney before it, Melbourne is enjoying the fruits of its construction boom: Pete Wargent

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<p>GUEST OBSERVER </p>
<p><em>An explanation of why central banks can’t deal with simultaneous low unemployment and inflation.</em></p>
<p>The financial data this week were largely centred on inflation in Australia and China, and what the Reserve Bank of Australia (RBA) thought about those things at their last board meeting.</p>
<p>This gives us the chance to focus on what is the most important issue in macroeconomics at the moment, and will govern the behaviour of the RBA, the US Federal Reserve, and the European Central Bank in coming years.</p>
<p>A key question in thinking about how central banks should set interest rates is the relationship between economic output and inflation. Too much inflation is bad, as is too little, so policymakers want to balance stable inflation with as much output (GDP growth, employment, etc) as possible.</p>
<p>But how to do this?</p>
<p>A tantalising candidate answer to this was offered by New Zealand economist A.W.H. Phillips. Looking at data in the United Kingdom from 1861 to 1957, he noted that when unemployment was high, wages increased slowly; when unemployment was low, wages rose rather quickly.</p>
<p>If this were a stable, predictable, relationship, this would be great news for policymakers. Pick where you want to position yourself on the inflation-output tradeoff and <a href="https://www.investopedia.com/terms/p/phillipscurve.asp" target="_blank">the Phillips Curve</a> tells you the answer.</p>
<p>Alas, it has long been know that this relationship is rather less clear than in Phillips’s data.</p>
<p>The <a href="https://www.investopedia.com/terms/r/rationaltheoryofexpectations.asp" target="_blank">rational-expectations</a> revolution, ushered in by <a href="https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1995/lucas-bio" target="_blank">Nobel Laureate Robert Lucas</a>, showed that a relationship like the Phillips Curve would depend on what people thought policymakers were going to do. In other words, you can’t rely on historical data when making policy, if those policies affect the data (as they always do). This is known as the “Lucas Critique”. And it’s right.</p>
<p>The thing is that policymakers need to make decisions, now. And being “right” is all well and good, but being practical is pretty important, too.</p>
<p>So for a long time, policymakers fudged things by using what they called the “expectations-augmented Phillips Curve”. Basically a hack.</p>
<p>But now, even that has broken down. Neither the Fed nor the RBA can understand within any framework how it can be that both inflation and unemployment are so low. Take the US: 4.2% unemployment and 1.4% inflation. It should be, according to basic economic theory, that when workers are so scarce one has to pay them more to work, so inflation goes up.</p>
<p>But not according to the data. The big and important question is: why not?</p>
<p>The cheap answer is that we are not measuring things correctly. For example, there is a lot of “underemployment” so that 4.2% isn’t really right – these folks aren’t working all the hours they want.</p>
<p>There is probably some truth in that, but it’s hard to believe there has been a dramatic shift in the proportion of those underemployed in the last decade. Even if it is true, it still begs the question: why?</p>
<p>I think it’s safe to say that not only does nobody know for sure, nobody has a good conjecture. Or, to quote the celebrated US baseball player Yogi Berra when a high-school teacher asked him: “don’t you know anything?”, Berra replied “I don’t even suspect anything”.</p>
<p>A wild guess is that it’s not mismeasurement, but technology.</p>
<p>A lot of employment relationships are now determined through online matching. There are fewer intermediaries – including unions. That has diminished the bargaining power of most workers, limiting their ability to extract higher wages when labour-market conditions are tighter.</p>
<p>In addition to this, central banks like the Fed and the RBA have now established a strong reputation for being tough on inflation. That has taken time to take hold, so it is reasonable to think that if there was an expectations-augmented Phillips Curve it would have changed over time – perhaps getting to where we are now.</p>
<p>The real test, of course, will be if central banks abandon inflation targeting in favour of more output-focused policies. That might well be the right thing to do. But I, for one, would be surprised if the relationship between unemployment and inflation didn’t change as a result of that.</p>
<p><img src="https://counter.theconversation.com/content/85824/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Or to put it a different way: Lucas was right.</p>
<p><em>Vital Signs is a weekly economic wrap from UNSW economics professor and Harvard PhD Richard Holden (@profholden). Vital Signs aims to contextualise weekly economic events and cut through the noise of the data affecting global economies.</em></p>
<p><span><a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">Richard Holden</a>, Professor of Economics and PLuS Alliance Fellow, <em><a href="https://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a></em></span></p>
<p>This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/vital-signs-economics-cant-explain-why-unemployment-and-inflation-are-both-low-85824" target="_blank">original article</a>.</p>
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rh-YsoTT2xMuQ

Economics can't explain why unemployment and inflation are both low: Richard Holden

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<p><img src="https://counter.theconversation.edu.au/content/81099/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1"></p>
<p class="p1"><span class="s1">GUEST OBSERVER</span></p>
<p class="p1"><span class="s1">Many people assume Australia’s regions are getting a raw deal compared to the big cities. But beneath the oft-told “tale of two Australia's” is a more nuanced story.</span></p>
<p class="p1"><span class="s2">New research released today by the Grattan Institute</span><span class="s1"> shows that income growth and unemployment rates are not obviously worse in regional areas. Cities and regions both have pockets of disadvantage, as well as areas with healthy income growth and low unemployment.</span></p>
<p class="p1"><span class="s1">But shifts in population are driving a wedge between city and regional Australia. Fewer people are living in remote areas. And because of this, the economy is becoming more concentrated in cities and large regional centres.</span></p>
<p class="p2"><a href="https://www.propertyobserver.com.au/images/2017/08/03/Screen%20Shot%202017-08-03%20at%209.16.25%20AM.png" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p2"><span class="s1"><img src="https://www.urban.com.au/images/2017/08/03/Screen%20Shot%202017-08-03%20at%209.16.25%20AM.png" alt=""></span></p>
<p class="p1"><span class="s1">Income growth was particularly high over the past decade in the mining areas of Western Australia and Queensland. But this is not just a mining-state phenomenon: average growth in income per person was similar in cities and regions across every state.</span></p>
<p class="p1"><span class="s1">Income growth was high in areas close to the centre of Sydney, Melbourne and Adelaide. But suburban parts of these cities did not fare so well – areas in Sydney’s west and Melbourne’s outer ring had some of the lowest income growth in the nation.</span></p>
<p class="p1"><span class="s1">The absolute level of income tends to be higher in the cities than the regions - but this has always been so. The highest taxable incomes in Australia are in Sydney’s eastern suburbs, followed by Cottesloe in Perth and Stonnington in eastern Melbourne. The only regional area in the top 20 areas by taxable income is the mining region of Pilbara in WA.</span></p>
<p class="p1"><span class="s1">The lowest taxable incomes are in Tasmania and the regions of the east-coast states, especially the far north coast of NSW, central Victoria and southern Queensland.</span></p>
<p class="p2"><span class="s1"><strong>Where unemployment is worst</strong></span></p>
<p class="p1"><span class="s1">Unemployment is not obviously worse in the regions than the cities, but both have areas of strong disadvantage.</span></p>
<p class="p1"><span class="s1">Parts of Far North Queensland have the highest rates of unemployment: 40% or more, compared to the national average of 6.1% in 2016. Most of these areas have had high unemployment rates for many years.</span></p>
<p class="p1"><span class="s1">Unemployment tends to be higher in large regional towns than in surrounding rural areas. In the capital cities, unemployment is concentrated along the “spines” - built-up areas that follow major roads.</span></p>
<p class="p1"><span class="s1">Unemployment got worse over the last five years in many areas where the jobless rate was already high. The unemployment rate increased in the northern parts of WA, the Northern Territory and Queensland between 2011 and 2016. Unemployment appears to be entrenched in these areas.</span></p>
<p class="p1"><span class="s1">Unemployment also got worse along city “spines”: the Ipswich to Carole Park corridor in Brisbane, and the Dandenong to Pakenham corridor in Melbourne. The exception was the Botany Bay to Liverpool corridor in Sydney, where unemployment improved but remains high.</span></p>
<p class="p2"><span class="s1"><strong>Population growth is much stronger in the cities</strong></span></p>
<p class="p1"><span class="s1">The regions are not noticeably falling behind in terms of income growth and employment. But there are big – and growing – differences in the location of economic activity and where people are choosing to live.</span></p>
<p class="p1"><span class="s1">A long-term trend in Australia’s economy continued in the past decade: fewer people are working in agriculture and manufacturing, and more are finding jobs in services. The loss of agricultural and manufacturing work is felt most keenly in regional and outer-suburban areas. And many service jobs – particularly professional services – tend to cluster in the centre of cities.</span></p>
<p class="p1"><span class="s1">Large regional towns exert a gravitational pull on the populations of smaller rural communities. Major cities have a stronger pull again, drawing younger and more-educated people from the regions as well as the majority of new migrants.</span></p>
<p class="p1"><span class="s1">This is evident in the population data over the past decade: in general, populations declined in small towns in the east-coast states and South Australia, but increased in larger regional centres. Population – and unemployment – also tended to increase faster in the towns along the east coast. Populations in the major cities, meanwhile, grew strongly.</span></p>
<p class="p20"><span class="s12">Voters in regional areas are <span class="s2">increasingly voting for minor parties</span>. It’s often suggested this is because of the <span class="s2">deteriorating economic position of the regions</span>.</span></p>
<p class="p1"><span class="s1">But given that people in regions have generally fared as well as those in cities over the past decade, major parties may need to look beyond income and employment to discover what is driving dissatisfaction among regional voters.</span></p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"></a></strong></span></p>
<p><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank">John Daley</a><a href="https://theconversation.com/profiles/john-daley-1870"> </a>is Chief Executive Officer, Grattan Institute.</p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"></a></strong></span></p>
<p><a href="https://theconversation.com/profiles/carmela-chivers-390957" target="_blank">Carmela Chivers </a>is Associate, Grattan Institute, Grattan Institute.</p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"></a></strong></span></p>
<p><a href="https://theconversation.com/profiles/danielle-wood-147710" target="_blank">Danielle Wood </a>is Fellow, Australian Perspectives, Grattan Institute.</p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"></a></strong></span></p>
<p>All are authors for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.</p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"> </a></strong></span></p>
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jchancellor-FAypfDUnLy

Australia’s city/country divide is not as wide as you may think

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<h3 class="post-title entry-title"> </h3>
<div>The ABS released its Characteristics of Recent Migrants survey for November 2016 yesterday, a release which the statistician puts out every three years. </div>
<h3 class="post-title entry-title"> </h3>
<div>The anti-immgration lobby will be trawling through the figures to see whether migrants were taking all our jobs (go home, we're full!) or not working enough (bludgers!), but in the end the three-year change in the figures wasn't all that remarkable.</div>
<h3 class="post-title entry-title"> </h3>
<div>Most migrants are employed, including 82 percent of skilled migrants, while the unemployment rate for Australian born citizens at 5.4 per cent was comfortably lower than the national average.</div>
<h3 class="post-title entry-title"> </h3>
<div>The labour force participation rate for recent migrants and temporary residents remained high at 70 per cent, and 84 per cent reported that wages or a salary were the main source of household income. </div>
<h3 class="post-title entry-title"> </h3>
<div><strong><span style="text-decoration: underline;">Recent migrants head to capitals</span></strong></div>
<h3 class="post-title entry-title"> </h3>
<div>The system is broadly working as it should, then, while the recent increase in permanent settlers is largely accounted for by an increased refugee intake from Iraq and Syria.  </div>
<h3 class="post-title entry-title"> </h3>
<div>One significant trend which stood out to me was the clear acceleration in recent migrants with their usual place of residence in one of the capital cities. </div>
<h3 class="post-title entry-title"> </h3>
<div>Migrants have always preferred the capital cities, of course, but at 88.3 percent the figure has clearly been accelerating higher over the past dozen years to now sit at incredibly high levels.  </div>
<h3 class="post-title entry-title"> </h3>
<div>Given that Australia's rate of immigration has also increased dramatically over the past dozen years this is potentially a hugely significant demographic trend.  </div>
<h3 class="post-title entry-title"> </h3>
<div>About 55 percent of Australia's population growth is presently accounted for by net overseas migration, while the other 45 percent relates to natural growth (being more births than deaths). </div>
<h3 class="post-title entry-title"> </h3>
<div>The trend towards capital cities holds true across all visa classes, but particularly so for those arriving as international students, a means of entry which is set to the most consequential driver of demographic trends.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/06/14/B1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><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/2017/06/14/B1.jpg" alt=""></div>
<h3 class="post-title entry-title"> </h3>
<div>Looking at the geographical figures it becomes clear that since the peak of the resources boom Western Australia is not attracting or retaining recent migrants as successfully as it once was, while the southern states have not been retaining as many migrants as they might wish to. </div>
<h3 class="post-title entry-title"> </h3>
<div>The slack has been instead picked up by Sydney, and to a lesser extent Melbourne.  </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/06/14/B2.jpg" target="_blank">Click to enlarge</a></div>
<h3 class="post-title entry-title"><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/2017/06/14/B2.jpg" alt=""></h3>
<div>Interestingly Sydney loses a chunk of its population each year interstate or to other parts of regional New South Wales, meaning that the residual population of Greater Sydney is heavily tilted towards overseas born residents. </div>
<h3 class="post-title entry-title"> </h3>
<div>Melbourne and Brisbane on the other hand are attracting migrants internally, and as a result absolute population growth is tracking at record highs in Greater Melbourne, and is picking up speed in Brisbane.</div>
<h3 class="post-title entry-title"> </h3>
<p class="p1"><span class="s1"><em>PETE WARGENT is the co-founder of </em><a href="https://allenwargent.com/"><span class="s2"><em>AllenWargent</em></span></a><em> property buyers (London, Sydney) and a best-selling author and </em><a href="https://petewargent.blogspot.com/"><span class="s2"><em>blogger</em></span></a><em>.</em></span></p>
<h3 class="post-title entry-title"> </h3>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
<h3 class="post-title entry-title"><a href="https://petewargent.blogspot.com.au/2017/06/migrants-flock-to-capital-cities-stay"> </a></h3>
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Migrants flocking to capital cities - and staying there too: Pete Wargent

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<div id="post-body-1755958549475955952" class="post-body entry-content">
<div>Couldn't think what to blog about today - creative juices aren't flowing at all, perhaps I need black coffee - so thought that for something different I'd take a look at Australia's oft-discussed government debt, and a few forecasts from the Australian Office of Financial Management (AOFM).<br><br>The unemployment rate in Australia has declined from 6.3 percent to 5.7 percent since the beginning of 2015, taking the trend unemployment rate to its lowest level in 34 months at 5.71 percent.</div>
<div> </div>
<div>Click to enlarge</div>
<br><div class="separator"><img src="/images/2016/09/01/B3.jpg" alt=""></div>
<br><div>The supporting figures, however, show that we are absolutely miles away from full employment, with oodles of part time work and under-employment around. </div>
<br><div>Indeed, tomorrow's capex report will likely show that the collapse of business investment in the <strong>mining</strong> sector has spilled over adversely into associated parts of the services and manufacturing sectors (since some of these businesses naturally provided inputs into the resources investment boom - warehousing, transport, equipment manufacture, and so on).<br><br>In effect, via the unwinding of mining capex resources regions will be experiencing the multiplier effect of the mining investment boom in reverse, sucking some mining-dependent regions in Western Australia and Queensland into a gravitational black hole. I think this has already happened, in truth, the data will just confirm it.<br><br>Anyway, that's tomorrow's news, but one senses the outlook for capital expenditure won't be all that great, and the recovery in all likelihood has a long way to run.<br><br><a href="/images/2016/09/01/Lifecycle.jpg" target="_blank">Click to enlarge</a>
</div>
<div>
<img src="/images/2016/09/01/Lifecycle.jpg" alt=""><br><br>(huge h/t to whichever internet wag created the above graphic - it gets me every time...too funny).<br><br><strong><span style="text-decoration: underline;">Some Treasury forecasts...</span></strong><br><br>As new resources projects come online, Treasury expects the Australian economy to keep growing at a solid clip, in part driven by increasing export volumes, particularly of LNG.</div>
<div> </div>
<div class="separator"><a href="/images/2016/09/01/AOFM2.jpg" target="_blank">Click to enlarge</a></div>
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<div>Treasury has maintained its positive forecasts for real GDP growth over the next few years, with economic growth to be aided by household consumption and net exports as the export volumes increase.</div>
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<div>However, these forecasts somewhat optimistically assume that household consumption will continue to remain positive, with the terms of trade holding also up at a level above anything we saw prior to the start of the boom (rather questionable given the trend since 2012!). Coking coal prices are booming - up by more than 40 per cent in August - but the outlook for iron ore prices may be grim.<br><br><div class="separator"><a href="/images/2016/09/01/TOT.jpg" target="_blank">Click to enlarge</a></div>
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<br>Tourism and education exports are also expected to be key contributors, a theme I've looked at quite a bit on this blog.<br><br><a href="/images/2016/09/01/Services.jpg" target="_blank">Click to enlarge</a><br><img src="/images/2016/09/01/Services.jpg" alt=""><br><br>
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<div><strong><span style="text-decoration: underline;">Government borrowing</span></strong></div>
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<div>While the government is making noises about trimming dollars and cents from its budget expenditure, behind the scenes the government is expected to keep borrowing hard, in part for infrastructure projects.<br><br>There are now $397 billion of Treasury bond securities across 23 lines on issue - a dozen of which have more at least A$20 billion outstanding - but look how low some of those coupon rates are...</div>
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<br><div class="separator">There are a further $30.6 billion of Treasury indexed bonds and $3.5 billion of Treasury notes, adding up to a total of <strong>$431.2 billion</strong> of government securities on issue. </div>
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<div class="separator">Fortunately bond yields are so low that the government can borrow at around the lowest yields on record without adding unduly to the interest burden.</div>
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<div class="separator">And government bonds on issue are expected to keep rising, with there having been strong inflows from Japan into Australia's debt securities over the last three years.</div>
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<div class="separator">Gross issuance of Treasury Bonds is expected to be A$90 billion in 2016-17, up marginally from last year, with net issuance of $68.9 billion (and an additional $3 billion of net issuance in Treasury Notes).</div>
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<div class="separator">That will take Australian government bonds on issue to well beyond 25 per cent of GDP (though Australia's net debt to GDP ratio is somewhat lower) - which is not really very high compared to other deficit countries - e.g. Japan, Canada, the United States, Greece, France, or the United Kingdom - but nevertheless moving in an unmistakeably northwards direction since the financial crisis took hold. </div>
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<div class="separator">How you feel about that really depends upon your position. Some argue that it's borrowing from the future. Others maintain that it makes a lot of sense to borrow for infrastructure projects when bond yields and coupon rates are so low, and while mining investment is still in freefall. </div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Government debt and the capex black hole: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>The April Labour Force report showed that labour market conditions remain okay, but momentum has slowed.</p>
<p>While labour market indicators remain mixed at the moment, we continue to expect the unemployment rate to remain close to the current 5.7 percent for the rest of the year.</p>
<p>Today’s numbers are unlikely to change the RBA’s view on the outlook; its focus has tilted more sharply towards inflation and we continue to expect another cut in the cash rate in August.</p>
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<p>Today’s labour market report showed continued slowing momentum in jobs growth. Employment is now up just +0.1 percent 3m/3m compared with +0.9 percent three months ago. That said, the stability in the unemployment rate at 5.7 percent suggests that the labour market remains in good shape.</p>
<p>Some labour market indicators have been mixed lately. For example, ANZ job ads have been essentially flat for the last six months, and an unemployment rate based on welfare payments ticked higher in March. But indicators like capacity utilisation and profitability in the business surveys point to a solid labour market.</p>
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<p>However, a preliminary read on our Fed-style labour market conditions index, which distils the common trend across a large number of indicators, was unchanged in April. This indicates to us that the labour market remains solid after last year’s sharp improvement was unwound. </p>
<p>RBA implications: While the RBA’s focus has shifted to the inflation outlook, as is always the case developments in the labour market are important for monetary policy deliberations. We think today’s numbers are likely to be broadly as the Bank expected.</p>
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<p>That said, we continue to expect another 25bp rate cut in August given the sharp downgrade to its inflation forecast.</p>
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Modest Australian jobs gain with steady unemployment: ANZ's Felicity Emmett

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<p><img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">GUEST OBSERVER</p>
<p>New findings from the Cost of Youth Homelessness in Australia research project, released on Thursday, show the rising costs of health and justice services associated with homelessness.</p>
<p>The homeless young people in the study reported significantly higher prevalence of adverse health issues than the general population, or even compared to other unemployed, job-seeking youth. This created an average additional cost, compared to the unemployed group, of A$6,744 per person per year.</p>
<p>Homelessness also means considerably greater contact with and involvement in the justice system. This was an average cost of $8,242 higher than for the unemployed group. The total cost offsets for young people becoming homeless is therefore an average of $14,986 per person per year.</p>
<p>On the basis of the 41,780 young people between aged 15 and 24 who were clients of Specialist Homelessness Services in 2014-15 and presented alone rather than in a family group, the total annual cost to the Australian economy of additional health and justice services is an estimated $747 million – or $626 million annually more than for unemployed youth.</p>
<p>This $747 million exceeds the total cost – approximately $619 million – of providing Specialist Homelessness Services to the 256,000 people (young and old) assisted by the system over the same period.</p>
<p><strong>Has ‘early intervention’ influenced policy?</strong></p>
<p>Early intervention to arrest the onset of youth homelessness is not a new idea.</p>
<p>Debate about early intervention started in the 1990s following several research projects that proffered evidence that it was possible:</p>
<p>• it was advocated in a parliamentary report on youth homelessness in 1995;<br> • it was examined by a government taskforce in 1996-97; and<br> • after a pilot program, the first early intervention program for at-risk and homeless young people, Reconnect, was launched.</p>
<p>But apart from Reconnect, little has been done to develop Australia’s early intervention capacity. This is despite “youth homelessness” having had a visible profile in the media and in public debate. This is undoubtedly in large part due to the 1989 Human Rights and Equal Opportunity Commission inquiry into youth homelessness.</p>
<p>Twenty-five years later, an independent National Youth Commission Inquiry into Youth Homelessness revisited the same issue in much the same way. It found the problem had not been substantially redressed.</p>
<p>In December 2008, a federal government white paper placed “early intervention” on the policy agenda as a means of “turning off the tap”. But little was done in six years of Labor governments.</p>
<p>And, despite a roundtable on prevention and early intervention convened in 2014 by then-social services minister Kevin Andrews, the Abbott and Turnbull governments have done nothing to give effect to the framework so positively received.</p>
<p>Specialist Homelessness Services assisted 250,000 men, women and children in 2013-14. Nearly one-third (30 percent) were single individuals. Another one-third were sole parents with children (33 percent). Just less than one-third were other families (29 percent). The balance consisted of “other groups” of non-related persons (7 percent).</p>
<p>In 2013-14, of the 76,200 individuals who were alone when they presented to services, 44,414 were young people aged 15-24 years – or nearly six out of every ten single clients.</p>
<p><strong>Widening the debate</strong></p>
<p>The debate about responding to homelessness has too often been confined to claims about increasing homelessness services or reforming homelessness services. The overall costs and benefits are not considered. The huge demand-driven costs associated with young people becoming homeless are not factored in.</p>
<p>Policies that respond to homelessness in ways that avoid these costs have to be more seriously considered. Our report’s findings provide a strong economic rationale for investing in early intervention to stem the flow of young people into homelessness.</p>
<p>And for those young people who become homeless despite early intervention – or who were already living independently prior to homelessness – the policy imperative is to support them to exit homelessness as quickly as possible.</p>
<p>For these young people, this involves setting them up in safe, secure and appropriate housing quickly – or rapid rehousing.</p>
<p>A rapid and agile response has proved difficult to deliver because it requires quick access to some form of appropriate youth housing.</p>
<p>The most important issue is wrap-around integrated support for young people to remain in education, training or employment as a way of replicating – as well as can be achieved – the all-inclusive support that families provide.</p>
<p>Waiting for early intervention and an adequate response to youth homelessness feels like “waiting for Godot”, as the two homeless men did in Samuel Beckett’s famous absurdist play. But, as the findings of our research show, the Australian community and economy are paying the substantial cost of the status quo.</p>
<p><em><span class="fn author-name"><a href="https://theconversation.com/profiles/adam-steen-249616" rel="author">Adam Steen</a> is p</span><span style="line-height: 1.3em;">rofessor in finance, Charles Sturt University and author for The Conversation. He can be </span>contacted<span style="line-height: 1.3em;"> <a href="https://theconversation.com/profiles/adam-steen-249616" target="_blank">here</a>.</span></em></p>
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