Low unemployment to add upward pressure on house prices

The rapidly improving labour market is likely to spur confidence and housing affordability, adding upward pressure to already strong house prices, according to Archistar chief economist Dr Andrew Wilson.

His comments come after the Australian Bureau of Statistics unveiled a sharp fall in jobless rates for February, to near-pre-COVID levels.

“The unemployment rate has fallen sharply over February and is now remarkably within striking distance of pre-COVID shutdown levels, less than a year from the commencement of the pandemic.

“The ABS reports that the national unemployment rate seasonally adjusted fell sharply by 0.5% over February to 5.8% - the lowest rate since the pre-covid result of 5.2% recorded over March 2020.

“The number employed nationally has now almost recovered to pre-covid levels to be now down by just 1800 since March 2020."

Dr Wilson noted all states reported falls in the jobless rate over February with QLD the best performer falling by 0.8%. NSW and VIC reported the lowest jobless rates at 5.6%.

“Capital city housing markets have recorded strong buyer demand this year so far with prices rising sharply – particularly in Melbourne and Sydney.," he said.

“And concerns over the possible significant negative impact on the economy of the tapering of the Job Keeper allowances at the end of this month will also likely to be to be misplaced – again.”