Reload original page
Market Update:
Week Ending 12th Feb 2010
Quick Summary:
Click the links below for quick reference or else read the article in full
Why Jobs Growth Is Good For Property Investors
There was good news about jobs this week. Economists were predicting unemployment, which was at 5.5%, to increase to 5.6%. It actually fell to 5.3%.
That's an estimated 52,700 more people employed, which the ABS notes "is the largest rise in employment since December 2006."
Low unemployment places upwards pressure on house prices, because with more competition for fewer employees, employers are forced to offer higher salaries. In turn, being paid more allows you to borrow larger amounts, and when you can borrow more money you can afford to pay more for property, and hence there is scope for growth in house prices.
It's not all beer and skittles though. The RBA will worry about inflation jumping higher as wages increase, which is why lower unemployment adds to the possibility of future interest rate rises.
Housing Finance Applications Fall In December
Last week I mentioned that new home sales fell in December, so it's not surprising that data released this week reported December housing finance applications fell 5.5% - the third straight monthly decline.
Reasons offered were: 1. Winding back the First Home Owners Grant (FHOG) meaning less people buying; and 2. Higher interest rates making property less affordable.
We will probably see further falls in January and February as the cuts to the FHOG are finalised, as well as the seasonal slow given the property market is on its 'summer vacation'.
The underlying trends of a housing shortage and strong immigration will see the data recover soon enough. The only factors that can sour the property market are sharp increases in interest rates, or panic in the face of a destabilised world economy.
All in all, the news seems bad at first glance, but we are probably through the worst of it and the data simply needs to catch up.
Want Financial Freedom In 10 Years Or Less?
Want to be financially free in 10 years or less? If so then be quick to grab one of the last remaining 'Elite Investor Packs'.
Included are five tremendous resources which combine to give you a blueprint for success - from buying your first property right the way through to acquiring a multi-property portfolio.
The link below provides you with full details - including how to get a 50% discount. But you'll need to hurry... there are only 24 packs left and the deal on offer now will never be repeated again!
Nothing is going to change by itself. If you want a comprehensive blueprint revealing how to use real estate to be financially free in
10 years or less, then grab our Elite Investor Pack while you can! It's the ideal leverage you need to achieve your financial dreams.
Find Out More About The Elite Investor Pack
