Monthly hours worked
This week sales rebounded by 8% with Perth recording 875 transactions which is very close to our 3-month average of 891. The increase was driven by houses and units registering an 8% and 31% increase respectively, however, vacant land sales fell by 18%. Listings decreased by 1% this week with 8,510 properties for sale. The graph below shows the previous upward trend in listings to the beginning of June has clearly ceased and has since been trending downwards. If listings continue to decrease and sales remain constant we should see support for property price increases.
This week prices increased by nearly 0.13% and the rolling average (grey line) is clearly moving down and away from the average Perth required (red line) for a 20% price increase over a 12-month period beginning in October 2020. The current average indicates Perth prices have increased by 10% since October 2020.
While we are on the topic of property prices during the pandemic (remembering prices were forecast to fall between 20-30%) KPMG Economics released a report titled “The Impact of Covid-19 on Australia’s Residential Property Market.” The report compares what property prices would have increased by if there was no coronavirus compared to prices with coronavirus and the subsequent record low interest rates and government building stimulus. Obviously these are forecasts based on assumptions but it was pretty interesting reading. The table below shows Perth prices would have increased by 31% without the pandemic and 35% with the pandemic.
Last week we examined the latest population figures because along with employment and interest rates, they are the major drivers of real estate prices. This week we will take a look at the latest employment figures. Monthly hours worked, our preferred measure of labour, showed WA recorded nearly a 1% increase as illustrated in the graph below.
However, even though the number of employed people increased by 0.9%, unemployment increased by 0.5% providing a mixed bag of results. On the ground there is no doubt a lot of businesses are reporting labour shortages due to the negative overseas migration leading to a massive local drive for apprenticeships and traineeships.