Weak Growth, Tight Job Markets Are a Global Phenomenon
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,516,817 (-0.06%)       Melbourne $971,359 (-1.00%)       Brisbane $819,969 (+2.77%)       Adelaide $731,547 (+1.72%)       Perth $621,459 (+0.34%)       Hobart $751,359 (-0.46%)       Darwin $633,554 (-4.02%)       Canberra $1,005,229 (+2.77%)       National $966,406 (+0.40%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $700,089 (-0.30%)       Melbourne $470,277 (-0.26%)       Brisbane $404,718 (+2.58%)       Adelaide $332,602 (+1.44%)       Perth $348,181 (-0.09%)       Hobart $551,005 (+2.68%)       Darwin $355,689 (-3.55%)       Canberra $477,440 (+4.12%)       National $484,891 (+0.89%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 8,451 (-507)       Melbourne 12,654 (-279)       Brisbane 9,158 (+847)       Adelaide 2,765 (-40)       Perth 9,974 (+39)       Hobart 595 (+36)       Darwin 247 (-1)       Canberra 666 (-49)       National 44,510 (+46)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,895 (+164)       Melbourne 8,149 (-24)       Brisbane 2,260 (+33)       Adelaide 649 (+5)       Perth 2,489 (-21)       Hobart 101 (-3)           Canberra 430 (+13)       National 23,351 (+167)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $630 $0       Melbourne $470 $0       Brisbane $460 ($0)       Adelaide $495 (+$5)       Perth $500 ($0)       Hobart $550 $0       Darwin $600 ($0)       Canberra $700 ($0)       National $562 (+$)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $540 (+$10)       Melbourne $410 (+$2)       Brisbane $460 (+$10)       Adelaide $380 $0       Perth $440 (-$10)       Hobart $450 $0       Darwin $500 ($0)       Canberra $550 $0       National $473 (+$2)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,470 (-50)       Melbourne 7,404 (-70)       Brisbane 1,986 (-122)       Adelaide 875 (-29)       Perth 1,838 (-38)       Hobart 254 (+18)       Darwin 70 (-3)       Canberra 388 (+17)       National 18,285 (-277)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 10,652 (+58)       Melbourne 9,001 (-180)       Brisbane 1,567Brisbane 1,679 (-62)       Adelaide 403 (+4)       Perth 1,050 (-21)       Hobart 87 (+1)       Darwin 131 (-10)       Canberra 453 (+43)       National 23,344 (-167)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.16% (↑)      Melbourne 2.52% (↑)        Brisbane 2.92% (↓)       Adelaide 3.52% (↓)       Perth 4.18% (↓)     Hobart 3.81% (↑)      Darwin 4.92% (↑)        Canberra 3.62% (↓)       National 3.03% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 4.01% (↑)      Melbourne 4.53% (↑)        Brisbane 5.91% (↓)       Adelaide 5.94% (↓)       Perth 6.57% (↓)       Hobart 4.25% (↓)     Darwin 7.31% (↑)        Canberra 5.99% (↓)       National 5.07% (↓)            HOUSE RENTAL VACANCY RATES AND TREND         Sydney 1.5% (↓)       Melbourne 1.9% (↓)       Brisbane 0.6% (↓)       Adelaide 0.5% (↓)       Perth 1.0% (↓)     Hobart 0.8% (↑)        Darwin 0.9% (↓)       Canberra 0.6% (↓)     National 1.2%        National 1.2% (↓)            UNIT RENTAL VACANCY RATES AND TREND         Sydney 2.3%ey 2.4% (↓)       Melbourne 3.0% (↓)       Brisbane 1.3% (↓)       Adelaide 0.7% (↓)     Perth 1.3% (↑)        Hobart 1.2% (↓)     Darwin 1.1% (↑)        Canberra 1.6% (↓)     National 2.1%       National 2.1% (↓)            AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 31.2 (↓)       Melbourne 30.9 (↓)       Brisbane 35.7 (↓)       Adelaide 27.6 (↓)       Perth 40.5 (↓)       Hobart 30.2 (↓)       Darwin 27.1 (↓)     Canberra 28.1 (↑)        National 31.4 (↓)            AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 33.7 (↓)       Melbourne 32.6 (↓)       Brisbane 34.8 (↓)       Adelaide 29.5 (↓)       Perth 46.6 (↓)       Hobart 27.4 (↓)       Darwin 38.2 (↓)       Canberra 30.2 (↓)       National 34.1 (↓)           
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Weak Growth, Tight Job Markets Are a Global Phenomenon

Economists cite ageing populations and relatively low immigration as factors that became more pronounced during the pandemic

By TOM FAIRLESS
Mon, Aug 8, 2022 11:40amGrey Clock 4 min

From Berlin to Tokyo to Sydney,  economic growth is slowing or turning negative across advanced economies, yet labour markets remain historically tight.

Talk of a “jobful recession” has centred on the U.S., where payrolls grew by more than half a million in July and the unemployment rate declined to its prepandemic low of 3.5% even as economic output contracted in the three months through June. The same conundrum crops up around the world.

In Germany, growth stalled in the three months through June, and the country faces imminent recession as its energy supplies dry up. But the unemployment rate remains close to a 40-year low, and almost half of companies say worker shortages are hampering production. The jobless rate in the wider eurozone is at a record low. New Zealand’s economy shrank in the first three months of the year, but its jobless rate, at 3.3%, has stayed close to a multidecade low.

It is the opposite of the “jobless recovery” diagnosed after the 2008 global financial crisis, when economic growth in the U.S. and parts of Europe picked up but unemployment remained painfully high for years.

The current dichotomy might not last. Central banks are raising interest rates to rein in high inflation, which could in time undercut labour demand. The Bank of England on Thursday raised its policy rate by 0.5 percentage point, to 1.75%, and forecast a lengthy recession that would likely boost unemployment to 5.5% from its current 3.8%, which matches the prepandemic low.

Still, subdued growth may coincide with ultralow unemployment more often in coming years, judging by the country that experienced it first. For three decades Japanese growth has been low or negative, averaging 0.8%, but its unemployment rate has never been more than 5.5% and has ratcheted steadily lower since 2010 to stand at 2.6% now—close to its prepandemic low of 2.2%.

The reason, economists say, is a tight labour market because of an aging population and relatively few immigrants, features that have become more pronounced in other advanced economies during the pandemic.

In the years before the pandemic, Japan took steps to make it easier for mothers of small children to work, keep older workers on the job, and loosen restrictions on migrant labour, such as allowing foreign students to work 28 hours a week. But just as those measures were making an impact, the pandemic hit and Japan closed its borders to most new workers.

A shortage of workers forced Masaya Konno, a business owner in Tokyo, to temporarily close his Japanese-style pub last month. Even after he increased pay to ¥1,300  an hour, which is ¥100 to ¥200 above the wages prevailing a year ago, he still can’t find enough workers. “We couldn’t overcome a labour shortage,” Mr. Konno said.

Unemployment and growth usually show a predictable relationship known as Okun’s Law, named for the Yale University economist Arthur Melvin Okun, who first proposed it in 1962. In the U.S., Okun’s law predicts that a 1% decline in output below its potential causes an increase in unemployment of half a percentage point.

However, that relationship can shift depending on factors such as workers‘ output per hour and labour-force growth, said Laurence Ball, an economics professor at Johns Hopkins University. If there are fewer workers and job seekers, the labour market can remain tight even if growth is weak.

Since February 2020, the U.S. labour force has shrunk by about half a million. In Germany, the labour force shrank by about 350,000 over the same period, while in the U.K. it shrank by about 550,000.

Migration has slowed across advanced economies as governments restricted entry to keep out Covid-19 and its variants. In New Zealand, the number of people arriving with work visas shrank from about 240,000 in the year through June 2019, to just 5,000 in the year through June 2021, government data show. In the U.S., the slowdown in immigration began in 2017, when the Trump administration adopted a range of policies to curb both illegal and legal immigrants. The annual net inflow has fallen from more than one million in 2015-16 to about a quarter of a million in 2020-21, according to the U.S. Census Bureau.

Meanwhile, older workers dropped out of the workforce, in some cases to avoid exposure to Covid-19. Some younger adults quit work to care for children or other family members.

There are signs that as vaccines cut the risk of severe illness or death from Covid, workers have returned to the labour force and migration has resumed. In New Zealand, the number of people arriving with work visas surged to almost 5,000 this past June. That suggests unemployment may start to respond more to changes in economic output.

Other forces might be more durable, however. Older people aren‘t yet returning to work in the U.S.: The labour-force participation rate of workers aged 65 or older has fallen to about 23% from 26% in early 2020. Rapidly aging Germany and Italy are expected to lose millions of workers to retirement over the next decade, which suggests labour shortages will persist.

While sustained low unemployment is generally a boon, Japan’s experience also shows the downsides: It means that the economy isn’t able to quickly direct workers to growth areas, which can limit “creative destruction”—the elimination of obsolete industries so that new industries can grow.

Takahide Kiuchi, an economist at Nomura Research Institute and former Bank of Japan policy board member, said, “Japan’s economy may look more stable with mild inflation. But the flip side of a stable economy is the negative impact of slow changes in the industrial structure.”

Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: August 7, 2022.

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RMIT expert says a conflation of factors is making the property market hard than ever to predict

By Robyn Willis
Thu, Oct 6, 2022 9:52am < 1 min

A leading property academic has described navigating the current Australian housing market ‘like steering a ship through a thick fog while trying to avoid obstacles’.

Lecturer in RMIT’s School of Property Construction and Project Management Dr Woon-Weng Wong said the combination of consecutive interest rate rises aimed at combating high inflation, higher property prices during the pandemic and cost of living pressures such as the end of the fuel excise that occurred this week made it increasingly difficult for those looking to enter or upgrade to find the right path.

“Property prices grew by approximately 25 percent over the pandemic so it’s unsurprising that much of that growth ultimately proved unsustainable and the market is now correcting itself,” Dr Wong says. “Despite the recent softening, the market is still significantly above its long-term trend and there are substantial headwinds in the coming months. Headline inflation is still red hot, and the central bank won’t back down until it reins in these spiralling prices.” 

This should be enough to give anyone considering entering the market pause, he says.

“While falling house prices may seem like an ideal situation for those looking to buy, once the high interest rates, taxes and other expenses are considered, the true costs of owning the property are much higher,” Dr Wong says. 

“People also must consider time lags in the rate hikes, which many are yet to feel to brunt of. It can take anywhere from 6 to 24 months before an initial change in interest rates eventually flows on to the rest of the economy, so current mortgage holders and prospective home buyers need to take this into account.” 

 

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