Low unemployment levels raise concerns over productivity, inflation
Not everyone is happy about the impacts of a tight labour market
2 min
Unemployment levels have remained steady at a low 3.7 percent, new figures from the ABS reveal.
Reflecting a tight labour market and ongoing high demand, data showed that participation levels were also at a record high of 67 percent with employment increasing to 14,096,100.
The news comes on the back of comments by Tim Gurner, CEO of property group Gurner Group, who said earlier this week that unemployment levels needed to rise in order to increase levels of productivity.
Speaking at a finance summit earlier this week, Mr Gurner said employees had become arrogant and needed reminding that they worked for the employer, ‘not the other way around’.
“Unemployment has to jump 40 to 50 per cent in my view. We need to see pain in the economy,” he said.
The comments made news around the world and have been condemned by employee groups, trade unions and politicians such as Greens MP Stephen Bates and US Democrat Alexandria Ocasio-Cortez who tweeted them to highlight the disparity between CEO to worker pay.
Incoming Reserve Bank Governor Michele Bullock also made comments in June that the unemployment rate would need to rise to 4.5 percent to help draw down inflation.
However, ABS head of labour statistics Bjorn Jarvis said indications for a tight labour market continued to be strong over July and August.
“With employment increasing by around 65,000 people and the number of unemployed only dropping slightly, by around 3,000 people, the unemployment rate remained at 3.7 percent in August,” Mr Jarvis said.
“The large increase in employment in August came after a small drop in July, around the school holiday period. Looking over the past two months, the average employment growth was around 32,000 people per month, which is similar to the average growth over the past year.
“The employment-to-population ratio rose 0.1 percentage point to 64.5 per cent, around the record high in June. The participation rate also increased, up to a record high of 67 percent in August, which, together with the high employment-to-population ratio, continues to reflect a tight labour market.”
Ophora Tallawong has launched its final release of quality apartments priced under $700,000.
From bushland greens to valley reds, the country’s most awarded designers are proving that the best colour palette was never on a swatch card; it was outside the window all along.
The federal budget has rattled property investors. But the biggest mistake isn’t the tax changes, it’s the conclusion many are drawing from them.
2 min
The recent budget has forced a reckoning for property investors.
Negative gearing now restricted to new residential builds, the CGT discount gone and on paper, the numbers look different.
And many investors are responding by pivoting toward yield, prioritising cash flow over capital growth in a way that property strategists say misses the point entirely.
“The debate has shifted to yield versus growth as if they are opposing forces,” says Abdullah Nouh, founder of Melbourne-based buyers’ agency Mecca Property Group. “But that framing is itself the mistake.”
Nouh, who works with high-net-worth families and investors on long-term acquisition strategy, argues that capital growth remains the primary driver of genuine wealth creation and that the post-budget environment has made quality assets more important, not less.
The numbers make his case plainly. An additional $500 per week in rental income is welcome. A prestige asset appreciating by $1 million over a market cycle is transformative.
These are not equivalent outcomes, and portfolios built around yield at the expense of location and land value tend to generate income while wealth stands largely still.
The more nuanced shift Nouh is seeing among sophisticated investors is a move toward assets where both outcomes can be engineered simultaneously – established homes on substantial land in quality locations, where the existing dwelling can be repositioned, rental returns improved, and the underlying land value compounds independent of what sits on it.
For investors with existing equity, commercial property is also entering the conversation in a more serious way.
Prestige industrial assets, medical centres and long-leased essential retail offer income profiles that residential property in most capital city markets cannot currently match: longer lease terms, tenants covering outgoings, and greater predictability than the residential tenancy cycle.
“The investors who build lasting wealth are rarely the ones who chased yield or growth exclusively,” says Nouh.
“They are the ones who built a strategy they could sustain – one that generated enough income to hold quality assets through multiple cycles while those assets compounded in value.”
The budget has changed the settings. It has not changed the fundamentals.
Now complete, Ophora at Tallawong offers luxury finishes, 10-year defect insurance and standout value from $475,000.
Once a sleepy surf town, Noosa has become Australia’s prestige property hotspot, where multi-million dollar knockdowns, architectural showpieces and record-setting sales are the new normal.
