Michael Marquette of Marquette Turner Luxury Homes writes:
Average weekly earnings in Australia are now at $1248.80 AUD for an adult working full time. This represents an increase of 5.4% over the last 12 months and unemployment is remaining well below Treasury estimates at 5.8% – or 669,000 people. This is positive news for Australia although is best considered in conjunction with underemployment which is currently estimated between 10-15%.
The shortage of housing in Australia seems set to continue with the Housing Industry Association indicating that there will be a 13% fall in housing starts for 2009, following an 18% fall in 2008. Developers have long argued that the cost of building in Australia is prohibitive and it comes as no surprise that the rate of new building continues to slow.
Australians are becoming increasingly reluctant to move between properties, with only 44% of households moving in the last 5 years, compared to 73% in 1999. 85% of renters have moved in the last 5 years, whilst 42% of home owners with a mortgage and only 15% of home owners without a mortgage.
It is widely believed that the Reserve Bank will increase interest rates further at the December meeting. This will of course impact greatly on those already feeling the pinch. John Symonds of Aussie Home Loans has publicly stated that many first home buyers have taken on too much credit. I have long believed that the First Home Owner Grant has acted to artificially increase house prices rather than making housing more affordable.
The median house price in Sydney now sits at $606,000 AUD, with the median price for units sitting at $457,000 AUD. Overall house prices in Australia fell by 4.2% in the year to March 2009, however, those losses have been already been recovered. Things are a little different, however, in the Luxury market where prices dropped by up to 20% in some of Sydney’s blue ribbon suburbs.