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Job Losses Affecting the Property Market
Monday, June 15, 2009
In terms of the overall market, unemployment figures for May were released late last week and showed a jump of 0.3%, taking the jobless rate to 5.7%. An AAP article quoted Kevin Rudd as saying Australia is “not out of the woods” despite the figures being slightly better than expected. The Federal Government is standing by its prediction in the May budget that unemployment will soar to 8.5% by mid-2011.
While recent news relating to the economy has been positive, indicators continue to point to a significant increase in job losses over the next two years. Experts are predicting that rising unemployment will result in a spike in the number of property repossessions. An article in Queensland’s Courier Mail last week reported a record number of repossessions in the state’s courts in April, while Adelaide’s Sunday Mail reported a 51% increase in the average monthly number of repossessions in the first five months of this year compared to the six months to December 2008.
With real estate offices around the country beginning to report a noticeable drop in the number of first home buyer enquiries, we are yet to see how a slackening in demand from this buyer segment will affect the rest of the market. As always, we encourage you to consider any interest around your property in light of current events. There is no certainty or even likelihood that conditions will improve markedly in the short to medium term.