<p>Melbourne developer Spacious Group has completed Voyage Altona, one of the closest new apartment developments to Altona Beach.</p>

<p>Off the plan purchasers have started moving into the 49-apartment project on Pier Street, with the remaining move-in-ready one-, two- and three-bedroom apartments starting from just over $500,000.</p>

<p>Display apartments have now been fitted out, allowing prospective buyers to inspect the completed residences by appointment.</p>

<p>[smartcode_project:default project_id=112195 project_image_fid=372638]</p>

<p>The completed apartments feature open-plan living and dining areas which extend onto private balconies and terraces, while full-height glazing maximises natural light throughout the interiors.&nbsp;</p>

<p>Hybrid timber-look flooring, stone benchtops, Miele appliances, porcelain-tiled bathrooms and generous storage feature throughout the building which also features landscaped communal areas, expansive shared terraces, lift access and secure on-grade parking.</p>

<p>Drawing inspiration from its bayside setting, Voyage adopts a restrained palette of warm neutral tones and textured finishes. Many of the apartments take advantage of views across Port Phillip Bay, while the indoor-outdoor living spaces have been designed to make the most of the coastal outlook.</p>

<p>[smartcode_project:default project_id=112195 project_image_fid=3286]</p>

<p>Voyage was developed to address what Spacious Group identified as an undersupply of higher-quality apartment product in Altona, with a focus on owner-occupiers looking to remain within the bayside community.</p>

<p>"Voyage responds to very strong local buyer demand for quality, owner-occupier-focused product," says Barry Plant Projects Director Jarrod Farey, who has handled sales since the project's launch.</p>

<p>"The project delivers an elevated lifestyle proposition, with its design and quality of finish far exceeding anything previously produced in the area, as well as its proximity to Pier Street Village and the beach."</p>

<p>The majority of purchasers have been local downsizers and owner-occupiers looking to stay within the Altona community but who previously had limited opportunities to buy a brand-new apartment.</p>

<p>[smartcode_project_cta:default project_id=112195]</p>


Joel Robinson

Spacious Group completes Voyage Altona in Altona's beachside precinct

<p>Homecorp has secured approval for a $360 million apartment development at Budds Beach, paving the way for one of the Gold Coast's most amenity-rich residential projects to launch later this year.</p>

<p>Gold Coast City Council has approved Lýon Residences, a 32-level tower that will deliver 178 two and three-bedroom apartments across a prominent corner site at 8-10 Acacia Avenue and 25-27 Oak Avenue.</p>

<p>The approval comes as developers continue to invest in premium lifestyle-driven apartment projects on the Gold Coast, where owner occupiers are increasingly prioritising amenity as much as apartment size and location.</p>

<p><a href="https://www.apartments.com.au/new-apartments/l-on-residences-25-27-oak-avenue-surfers-paradise-qld-4217">Lýon Residences</a> has been designed around a resort-style wellness offering, headlined by a Moroccan-inspired spa precinct featuring treatment rooms, a Nordic sauna and steam room, hot and cold plunge pools, a soaking pool and a residents-only juice bar.</p>

<p>The rooftop will include a heated infinity pool and spa, residents' lounge with private kitchen and bar, gymnasium, yoga and Pilates studio, outdoor entertaining areas and barbecue facilities overlooking the Surfers Paradise skyline.</p>

<p><img alt="Lyon" data-entity-type="file" data-entity-uuid="2d3e29af-8793-486e-a684-52cef862241f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-15%20at%204.32.26%E2%80%AFPM.png?VersionId=ayG2zpLf3SS6Zy8XmKDcQods4kVWb0gm" /></p>

<p>Homecorp Founder and CEO Ron Bakir said Budds Beach provided the ideal location for the company's latest luxury apartment project.</p>

<p>"Budds Beach represents one of the most unique and sought-after pockets of the Gold Coast, and Lýon Residences has been designed to reflect that sense of rarity and refinement," Bakir said.</p>

<p>The project arrives as wellness continues to become a defining feature of new residential developments both in Australia and internationally.</p>

<p>The latest Global Wellness Institute figures show wellness real estate remains the fastest-growing segment of the global wellness economy and is forecast to exceed $1.8 trillion by 2030. Australia continues to rank among the world's 15 largest wellness real estate markets, with developers increasingly integrating health, recreation and community facilities into apartment projects.</p>

<p>Queensland is also experiencing strong population growth, with the Gold Coast continuing to outperform many other Australian cities as demand for new housing remains elevated ahead of the 2032 Olympic and Paralympic Games.</p>

<p>Bakir said the project had been designed to respond to that shift in buyer expectations.</p>

<p>"Strong population growth and sustained demand across the Gold Coast continue to highlight the need for well-designed new housing supply. Lýon Residences responds directly to this demand while setting a new benchmark for residential living," he said.</p>

<p>Each apartment has been designed to maximise views across the coastline, the Nerang River and the Gold Coast hinterland.</p>

<p>Located just minutes from Surfers Paradise beach and the Broadwater, the development also offers easy access to the light rail network, Broadbeach and Burleigh Heads.</p>

<p>Early site works are underway, with construction expected to commence later this year.</p>


Homecorp approved for Budds Beach apartment tower, Lýon Residences

<p>New apartment developments with uninterrupted, north-facing views over Perth's Swan River are exceptionally rare.</p>

<p>Recognising just how limited those opportunities are, <a href="https://www.apartments.com.au/developers/edge-visionary-living">Edge Visionary Living</a>, one of Perth's most respected builder-developers, targeted <a href="https://www.apartments.com.au/developments/applecross-wa-6153">Applecross</a>, assembling an unrepeatable 6,342 sqm riverfront site on the corner of Moreau Mews and Canning Beach Road to create one of Perth's only new north-facing apartment developments directly overlooking the Swan River.</p>

<p>Today, <a href="https://www.apartments.com.au/buildings/riviere-residences-applecross-59-canning-beach-road-applecross-wa-6153">Rivière Residences</a> offers buyers a unique opportunity to choose between completed residences ready to move into now and off-the-plan homes in the final stage, Rivière West.</p>

<p>[smartcode_project:default project_id=28384 project_image_fid=3823]</p>

<p>Across the completed East and Central buildings, residents are already enjoying the development's luxury amenity, while two of the precinct's hospitality venues are now open.</p>

<p>The completed component of the development gives buyers the advantage of experiencing the finished product firsthand, including its uninterrupted river views, while still having the opportunity to secure a residence in the final stage.</p>

<p>"People are wowed by the view and the quality of the apartments,"&nbsp;Edge Visionary Living Sales Executive, Holly McSweeney, says.</p>

<p>"They're looking for the convenience of lock-and-leave living, but they're not looking to downsize on quality."</p>

<p>[smartcode_project:default project_id=28384 project_image_fid=3826]</p>

<p>The rarity of the development hasn't been lost on prospective buyers, McSweeney says.</p>

<p>For McSweeney, it all comes back to a location that is becoming increasingly difficult to replicate.</p>

<p>"Location, location, location," she says. "We are nestled right on the front of the Swan River. You can never get built out, so wherever you are in Rivière Residences, you've got views of the river forever."</p>

<p>The unique waterfront position has resonated particularly strongly with local downsizers. McSweeney says many buyers are long-time Applecross residents looking to transition from large family homes into a luxury apartment without sacrificing space, quality or the lifestyle they've enjoyed for decades.</p>

<p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/N_FowNW0wu8?si=vb25XFq1wZ-iufAW" title="YouTube video player" width="560"></iframe></p>

<p>A major focus for Edge in recent years has been resident amenity. Across its apartment portfolio, from beachfront developments in Scarborough to luxury towers in South Perth, the developer has increasingly invested in the spaces beyond the apartment itself.</p>

<p>The strategy has largely been shaped by downsizer demand. Many buyers are moving from large family homes with swimming pools and established gardens. While they're looking to leave the maintenance behind, they don't want to compromise on lifestyle.</p>

<p>At Rivière, <a href="https://www.apartments.com.au/architects/hillam-architects">Hillam Architects</a> designed the resident facilities as an extension of each apartment. A 25-metre heated swimming pool takes advantage of the north-facing river outlook, complemented by a large gym, sauna and steam rooms, private dining spaces, residents' lounges, a cinema, games room, and dedicated wine and whisky rooms.</p>

<p>[smartcode_project:default project_id=28384 project_image_fid=372542]</p>

<p>The waterfront location has also proved to be a major drawcard. Residents are within walking distance of the Raffles Hotel, South of Perth Yacht Club, the Heathcote Cultural Precinct and the cafés, restaurants and boutiques along Ardross Street.</p>

<p>Beyond the location and amenity, McSweeney says many buyers take confidence from Edge's fully integrated development model.</p>

<p>Having delivered apartments across Perth for decades, Edge now designs, develops and constructs its projects in-house, giving the company greater control over quality, delivery and the finished product.</p>

<p>"What I love is when people walk through their apartment for the first time and say, 'This is better than what we imagined,'" McSweeney says. "We hear that all the time."</p>

<p>Completed apartments in the East and Central buildings are now available to inspect by appointment, while Rivière West, the final stage of the precinct, is expected to be completed in the first quarter of 2027.</p>

<p>[smartcode_project_cta:default project_id=28384]</p>


North-facing Swan River views drive demand at Rivière Residences in Applecross

<p>Nearly 60 per cent of apartments at McNab Group's $220 million The Tannery development in Brisbane's West End have sold ahead of the project's public launch, including a suburb-record $2.57 million sale for a two-bedroom apartment.</p>

<p>The early sales campaign has secured buyers for 50 of the project's 87 apartments, highlighting continued demand for larger owner-occupier apartments that combine generous floorplans with premium lifestyle amenities in one of Brisbane's most tightly held inner-city suburbs.</p>

<p>[smartcode_project:default project_id=143337 project_image_fid=374768]</p>

<p>McNab Group Executive Chairman Michael McNab said selling more than half the project before launch reflected changing buyer expectations.</p>

<p>"Selling more than half the project before public sales open tells us buyers are actively seeking apartments that offer something genuinely different," McNab said.</p>

<p>"Today's buyers are looking beyond four walls. They want homes that genuinely enhance the way they live, with spaces that support health, connection and everyday wellbeing."</p>

<p>[smartcode_project:default project_id=143337 project_image_fid=374767]</p>

<p>A key point of difference for the project is the adaptive reuse of the heritage-listed Dixon's Tannery building, which will become The Retreat, a residents-only wellness precinct rather than being redeveloped into additional apartments.</p>

<p>The Retreat will feature a sauna and steam room, hot and cold plunge pools, a commercial-grade gym, Pilates studio, cinema, library, co-working spaces and private dining room. Rooftop amenities will include a swimming pool, landscaped gardens, outdoor entertaining areas and dog-friendly spaces.</p>

<p>[smartcode_project:default project_id=143337 project_image_fid=374760]</p>

<p>Designed by Cottee Parker Architects with interiors by Tom Mark Henry and landscape architecture by Aspect Studios, The Tannery comprises 87 two, three and four-bedroom apartments across 11 levels overlooking the Brisbane River.</p>

<p>Cottee Parker principal Dee Passenger said preserving the original tannery building had been central to the project's design.</p>

<p>"The easy option would have been to maximise the site's development potential with additional apartments. Instead, McNab has chosen to preserve the original tannery as a shared wellness retreat, ensuring this important piece of Brisbane's history remains at the heart of the community."</p>

<p>Passenger said sustainability also played a key role in the design, with materials from the original industrial site salvaged and repurposed throughout the development.</p>

<p>[smartcode_project:default project_id=143337 project_image_fid=374761]</p>

<p>Motiv CEO Carly Cottam said buyers had responded strongly to the combination of larger apartments, wellness facilities and the West End lifestyle.</p>

<p>"We are seeing more buyers looking for homes in the sky that provide the space and functionality of a traditional home, while benefiting from the convenience and lifestyle that apartment living brings," Cottam said.</p>

<p>She said purchasers included both owner occupiers and investors, with demand coming from local buyers as well as interstate purchasers.</p>

<p>Coinciding with the public launch, McNab also announced a partnership with Queensland Ballet, whose neighbouring Thomas Dixon Centre shares historical ties with the original Dixon family.</p>

<p>Located on a 4,465 sqm site at 439 Montague Road, The Tannery overlooks the Brisbane River and is around 10 minutes from the CBD.</p>

<p>Construction is underway, with completion expected in the second half of 2027.</p>

<p>[smartcode_project_cta:default project_id=143337]</p>


More than half of residences sold before public sales as McNab announces significant partnership with Queensland Ballet

McNab's The Tannery nears 60 per cent sold before public release, sets two-bedroom West End record

<p>Iwan Sunito's vision for a landmark mixed-use precinct in Sydney's Inner West has taken a major step forward, with approval granted for the $1.9 billion Five Dock development first unveiled earlier this year.</p>

<p>The approved scheme by <a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a> will deliver an 80,500 sqm mixed-use precinct comprising 840 apartments, integrated hotel accommodation, commercial and retail space, alongside publicly accessible open space designed to create a new destination for the growing suburb.</p>

<p>"This is a significant milestone for One Global Capital and for the future of housing delivery in Sydney," Sunito said.</p>

<p>"The Housing Delivery Authority was established to identify major housing projects capable of delivering meaningful supply more efficiently, and we are delighted that Spencer Street has been recognised as one of those projects.”</p>

<p>He said the declaration reflected the rapid progress achieved since acquiring control of the site.</p>

<p>"In less than seven months we have progressed from taking control of the site to securing entry into one of the NSW Government's most important planning pathways. It reflects the experience of our team, the strength of our consultant group led by Urbis, and our long-term commitment to delivering transformational projects that contribute to Sydney's future."</p>

<p>When the project was revealed earlier this year, Sunito described the opportunity as one of the strongest development sites he had worked on.</p>

<p>"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito said.</p>

<p>"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."</p>

<p>The development has evolved since its initial announcement, with the approved plans increasing the residential component from the originally proposed 750 apartments to 840 homes while retaining the project's focus on creating an integrated neighbourhood rather than a standalone residential development.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/a-city-within-a-city-iwan-sunito-flags-1-5-billion-mixed-use-precinct-in-five-dock">"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock</a></em></p>

<p>The precinct will combine apartments with hotel accommodation, commercial workplaces, retail offerings and public spaces, creating a mixed-use environment intended to serve both residents and the broader Five Dock community. The proposal also continues the collaboration between One Global Capital and internationally recognised architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, whose previous work with Sunito includes Infinity, Arc and Skye North Sydney.</p>

<p>Takada previously said the design was driven by a philosophy of integrating nature into the built environment.</p>

<p>"The concept for this development is born from our design approach to naturalising architecture," Takada said.</p>

<p>"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."</p>

<p>Sunito has consistently described the project as a "city within a city", with a strong emphasis on creating a destination that extends beyond housing.</p>

<p>"We want to create a development that's not only to be seen, but to be experienced by the whole local community," he said.</p>

<p>The approval comes as Five Dock continues its transformation ahead of the opening of the Sydney Metro West line, with the new Five Dock station set to significantly improve connections between the Inner West, Parramatta and the Sydney CBD.&nbsp;</p>

<p>The precinct will also benefit from its proximity to the Parramatta Road corridor, nearby waterfront parklands and established retail and dining offerings that have made Five Dock one of Sydney's most tightly held Inner West suburbs.</p>


Iwan Sunito secures approval for $1.9 billion Five Dock mixed-use precinct

Unemployment

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<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>
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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

<html><body>
<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>
<div class="separator"><img src="/images/2016/09/01/AOFM2.jpg" alt=""></div>
<div> </div>
<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>
<div> </div>
<div class="separator"><a href="/images/2016/09/01/AOFM3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/09/01/AOFM3.jpg" alt=""></div>
<div> </div>
<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>
<div class="separator"><img src="/images/2016/09/01/TOT.jpg" alt=""></div>
<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>
</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Government borrowing</span></strong></div>
<div> </div>
<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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