Market News

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<p><span>GUEST OBSERVER</span></p>
<p><span>Business confidence slipped in October, offsetting most of the gains made in the previous month in response to the new Prime Minister. Although it is still early days for the new government, this is a disappointing result. On the other hand, current business conditions remained at their high level, reflecting the general improvement in the non-mining economy. </span></p>
<span style="line-height: 1.3em;">After business confidence rose sharply in September, we noted the importance for both the government and the broader economy of sustaining this increase. </span><span style="line-height: 1.3em;">Today’s data suggest that this is not going to be a straightforward task. </span><span style="line-height: 1.3em;">However, the fall is somewhat surprising given solid increases in consumer confidence and in the government’s poll results over the same period.</span>
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<br><span style="line-height: 1.3em;">That said, the fall in the NAB measure of business confidence brings it broadly back into line with the Roy Morgan business confidence series, which had been weaker previously.</span>
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<br><span style="line-height: 1.3em;">It appears that Australian businesses are still sensitive to overseas conditions</span><span style="line-height: 1.3em;">. Australian business confidence has tracked the softening in the global PMI which is a good proxy for global growth (Figure 2).</span>
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<br><span style="line-height: 1.3em;">In more positive news, current business </span><span style="line-height: 1.3em;">conditions </span><span style="line-height: 1.3em;">remained elevated and are supportive of further </span><span style="line-height: 1.3em;">solid growth in the non-mining economy </span><span style="line-height: 1.3em;">in the near term (Figures 3 and 4).</span>
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<br><span style="line-height: 1.3em;">The details were also encouraging. While profitability has eased a little, it remains at a high level and bodes well for near-term employment growth (Figure 4). Capacity utilisation continued to slowly improve, but our view is that ample spare capacity remains in the economy, limiting upward pressure on inflation, despite the risk that we see some belated pass-through from the lower AUD to tradables inflation (Figure 7). </span>
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<p>Daniel Gradwell is e<span style="line-height: 1.3em;">conomist and </span><span style="line-height: 1.3em;">Justin Fabo is s</span><span style="line-height: 1.3em;">enior economist <a href="https://www.anz.com/corporate/research/" target="_blank">ANZ Research</a>.</span></p>
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jchancellor-FAypfDUnLy

 Australian business confidence unwinds most of the Turnbull bounce: ANZ Research

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<p><span>GUEST OBSERVER</span></p>
<p><span>Three-quarters of parents expect to make a contribution towards their adult child’s first property purchase, according to a registrant survey for our upcoming webinar, How to advise adult children about property.</span></p>
<p><span>Helping out with the deposit is the preferred route for 6 out of 10 parents, whilst 1 in 10 is considering helping their offspring pay the mortgage.  Just 6% of parents would go as far as buying the property on their child’s behalf.</span></p>
<p><span>Investment properties shade homes as the preferred first property. 35% of parents are considering an investment property compared to 27% looking for a home. But many remain open-minded, with 38% unsure whether to go for a home or an investment property.</span></p>
<p><span>Parents appear to prefer a house as the first home whilst apartments are more favoured amongst investor-focused parents.</span></p>
<p><span>Respondents voiced a number of fears around helping their children out.</span></p>
<p><span>The most cited was a breakdown in the relationship between their child and his or her spouse and the estranged partner making a claim on the parents’ gift. Parents also worry about encouraging a child to buy a property that fails to perform and also about ensuring all their children are treated equally.</span></p>
<p><span>Finally, some parents are concerned that their child won’t take the financial commitment seriously.</span></p>
<p>Paul Nugent is a director of Wakelin Property Advisory. He is co-presenting a webinar <strong>How to advise adult children about property </strong>12.30pm, Thursday 29<sup>th</sup> October. <a href="https://wakelin.com.au/fpb_webinar" target="_blank">Click here to register.</a></p>
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House or apartment investment quandary facing parents: Wakelin's Paul Nugent

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<p>There are mounting signs that Australia’s housing market may be moving through the peak of the cycle, however it is important to remember that strong housing market conditions have been evident in Sydney and Melbourne while every other capital city has shown relatively sedate conditions.</p>
<p>CoreLogic’s September indices results, released two weeks ago, showed that Sydney dwellings values remained flat over the month and other data flows are also pointing to a moderation in growth conditions across Australia’s largest city and the broader housing market.</p>
<p><strong>The factors that hinting at a market peak (and outlined in further detail below) include:</strong></p>
<ul>
<li>Auction results have been consistently moderating, especially in Sydney where clearance rates have been sub 70% consistently over the past five weeks</li>
<li>Listing numbers are rising, which is normal during the Spring season, but a higher than normal number of homes are being added to the market in Sydney which is contributing to higher stock levels than a year ago and rising months of supply.</li>
<li>Investment demand is moderating due to both tougher lending from the banks as well as market disincentives such as low yields, affordability constraints and a mature growth cycle.</li>
<li>Mortgage related activity has fallen across CoreLogic platforms. Although activity remains higher than a year ago, mortgage related events are down from heights seen over the first half of 2015 and aren’t seeing their normal spring bounce.</li>
<li>Rents are hardly moving which has pushed rental yields to historic lows in Sydney and Melbourne. Paying a landlord is likely becoming more affordable than paying a mortgage despite the low interest rate setting.</li>
<li>The cost of debt is rising outside of any upwards movement in the cash rate. Higher debt servicing costs can only act as a disincentive.</li>
<li>Supply levels are set to rise further as the pipeline of approvals moves through the commencement phase and onto completed housing product. Inner city apartment markets are most exposed to higher supply.</li>
</ul>
<p>While conditions may be starting to slowdown, particularly in Sydney, the coming months will provide further clarity about housing market conditions. Picking the turning point in the housing market is easy in retrospect, but as the market evolves it can be hard to separate short term movements from the beginnings of a longer term trend.   The coming months of data flows through to the end of the year will provide a great deal more perspective.”</p>
<p><strong>Mature growth cycle</strong><br>The current growth cycle broadly commenced in June 2012, with dwelling values shifting almost 32% higher since this time across the combined capital cities. The rate of capital gains has been led by Sydney where values are almost 50% higher, and Melbourne where dwelling values have shifted 35% higher over the cycle to date. Brisbane has seen the third highest rate of value growth over the period at a comparatively modest 14.5% showing the multi-tiered nature of the capital city housing market at present.</p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.04.03%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.04.03%20AM.png" alt="" width="790" height="598"></p>
<p><strong>Dwelling values do fall.</strong><br><span>Capital city dwelling values retreated by 7.2% over the previous down phase which lasted from October 2010 through to the end of May 2012, and previously during the GFC period of 2008 capital city dwelling values shifted 6.1% lower.</span></p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.05.26%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.05.26%20AM.png" alt="" width="836" height="614"></span></p>
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<p><strong>Auction results are moderating but remain historically high</strong><br>The auction market peaked over the last week of April this year with a combined capital city clearance rate of 82%. Since that time, clearance rates have been consistently falling, with weekly clearance rates holding below the 70% mark over the past five weeks.</p>
<p>Sydney has shown a similar trend, with clearance rates peaking at 90% over the last week of April. Sydney’s clearance rate was recorded at 63% last week, the lowest clearance since March 2013. The lower clearance rate comes on substantially higher volumes compared with a year ago. The Spring season to date has seen 7,193 auctions held across Sydney which is 1,609 (29%) higher than over the same period a year ago.</p>
<p>The slump in clearance rates hasn’t been as sharp in Melbourne where the weekly clearance peaked at 87% over the last week of April and has consistently reduced to the current level of around 73%. Melbourne clearance rates haven’t slipped below 70% since February this year. Auction volumes across Melbourne are at roughly the same level as a year ago, with 7,394 auctions held so far this Spring (7,381 at the same period a year ago).</p>
<p>Outside of Sydney and Melbourne, auction sales are only a small proportion of all sales. Over the year to date, Sydney and Melbourne account for 84% of all auctions held across the capital cities.</p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.07.10%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.07.10%20AM.png" alt="" width="880" height="1011"></p>
<p><strong>Listing numbers are rising</strong><br><span>While it’s normal for listing numbers to ramp up during the Spring season, the number of new listings being added to the Sydney housing market is now 4.4% higher than last year and total listing are nearly 6% higher than a year ago suggesting new advertised supply isn’t being absorbed as fast as a year ago. The same trend of higher listing numbers has been evident for some time in the weakest housing markets of Darwin and Perth where total listing are roughly 12% higher compared with a year ago.</span></p>
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<p><span><img src="/images/2015/10/26/8-580x378.jpg" alt=""></span></p>
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<p>Listing numbers haven’t seen the same escalation in Melbourne where the housing market doesn’t appear to be slowing at the same pace as the Sydney market. Listing numbers remain lower than a year ago in Brisbane, Adelaide and Hobart as well, where value growth has been much more moderate compared with Sydney and Melbourne.</p>
<p><strong>With listing numbers rising in some markets, ‘months of supply’ is also rising</strong></p>
<p>‘Months of supply’ provides an indication about how long it would take, based on the current rate of sale, the market to absorb all the homes currently being advertised for sale. Sydney is still showing the months of supply reading at 2.4 months, however, we have seen the first rise in this reading since 2012.<br>At the same time, months of supply is holding firm in Melbourne but reducing in Brisbane, Adelaide and Hobart. Where housing market conditions are weaker (Perth, Darwin, Canberra) the monthly of supply readings are rising, providing better buying conditions for prospective purchasers.</p>
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<p><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.12.39%20AM.png" alt=""></p>
<p><strong>Investment demand appears to be moderating</strong><br><span>The value of investment related housing finance commitments has reduced over three of the past four months and owner occupiers have once again overtaken investors as being the most active segment of the housing market based on the value of new loans being committed to.</span></p>
<p><br><span>The slowdown in investment related mortgage activity has been evident across every state, but has been most felt in New South Wales, where investors have reduced from comprising nearly 63% of the market in May this year to a much lower (but still high from a historical perspective) 54.9% in August. It’s likely investment activity has reduced further over recent months due to the premium being placed on investment mortgage rates and a requirement for larger deposits, as well as natural disincentives such as record low rental yields and affordability and affordability constraints.</span></p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.14.16%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.14.16%20AM.png" alt=""></span></p>
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<p><strong>Mortgage related activity has eased from historically high levels across CoreLogic mortgage platforms</strong></p>
<p>CoreLogic facilitates more than 90% of all mortgage related valuation instructions, which provides one of the timeliest indicators of mortgage activity available. While mortgage activity is approximately 4% higher than at the same time last year, activity has moderated from the highs recorded earlier in the year.</p>
<p><a href="/images/2015/10/26/15-580x301.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/15-580x301.jpg" alt=""></p>
<p><strong>Weekly rents are hardly moving and gross rental yields have pushed to record lows</strong><br><span>Across the combined capital cities, weekly rents have increased by only half a percent over the past twelve months. At a time when capital city dwelling values have increased by 11.0%, the sluggish pace of rental movements has pushed rental yields to the lowest level on record.</span></p>
<p><span>Gross rental yields are the lowest in Melbourne and Sydney at just 3.0% and 3.3% respectively (lower for detached houses and slightly higher for apartments) and also sit at record low levels. Accounting for holding costs such as vacancy, property management fees, maintenance etc, the net rental yield in these cities likely to be around the low to mid two percent mark.</span></p>
<p><span>The low yield scenario is likely to act as another disincentive for investors at a time when the growth cycle has been running for almost three and half years.</span><br><span>for investors at a time when the growth cycle has been running for almost three and half years.</span></p>
<p><a href="/images/2015/10/26/16-580x152.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/16-580x152.jpg" alt=""></span></p>
<p> </p>
<p><strong>Costs of debt are rising out of cycle with the cash rate</strong></p>
<p>In July this year Australia’s largest banks placed a premium on investment related mortgage rates of between 27 and 29 basis points. More recently, Westpac has announced additional premiums on mortgage rates for both owner occupier and investment loans outside of any movement in the cash rate.</p>
<p><a href="/images/2015/10/26/17-580x227.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/17-580x227.jpg" alt=""></p>
<p> </p>
<p><strong>Supply levels are set to increase further</strong></p>
<p>Dwelling approvals appear to have peaked earlier this year after an unprecedented boom in the number of dwellings approved for construction. As the pipeline of approvals migrates to project commencements and ultimately completions, we can expect the supply of new housing, particularly apartments, to provide a further easing in price upwards price pressures.</p>
<p>The majority of new supply set to hit the market will be in Melbourne and Sydney where population growth has remained the strongest, however Brisbane and Perth have also seen a substantial influx of new housing approvals. In last week’s Financial Stability Review the Reserve Bank warned of the risk of a potential housing over-supply in inner city areas of Melbourne and Brisbane due to the large boom in new apartment construction.</p>
<p><a href="/images/2015/10/26/18-580x202.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/18-580x202.jpg" alt=""></p>
<p><em>Tim Lawless is head of the CoreLogic RP Data research and analytics team and can be contacted <a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank">here</a>.</em></p>
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tlawless-5VLUrbAk9s

The seven signs that the property market may be peaking: Tim Lawless

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<p>EXPERT OBSERVER</p>
<p>As dwelling values and transactions decline and stock for sale mounts properties are taking longer to sell across most regions of the country.</p>
<p>Over the three months to October 2018, properties nationally had a median time on market of 53 days.</p>
<p>As the first chart shows there has been a clear increase in days on market of late, up from 42 days a year ago and a recent low of 38 days in December 2017.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%201.JPG" alt=""><img src="https://www.urban.com.au/images/2018/11/29/DOM%202.JPG" alt=""></p>
<p><em>Source: CoreLogic</em></p>
<p>Across the combined capital cities, the median days on market sat at 46 days over the three months to October 2018 compared to 61 days across the combined regional markets.</p>
<p>Across each of these broad regions the days on market figure was higher than during the previous year when it was recorded at 35 days and 55 days respectively.</p>
<p>The capital city days on market figure is now the highest it’s been since March 2016 and across the combined capital cities it is the highest since October 2016.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%203.JPG" alt=""></p>
<p><em>Source: CoreLogic</em></p>
<p>Although the median days on market in Sydney and regional NSW has edged slightly lower over recent months, across both regions, days on market is higher than a year ago.</p>
<p>In Sydney, the median days on market was 31 days a year ago and has increased to 50 days currently which is much higher than the recent low of 24 days in April 2017.</p>
<p>Across regional NSW, days on market currently sits at 64 days compared to 52 days a year ago and a recent low of 48 days in May 2017.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%204.JPG" alt=""></p>
<p><em>Source: CoreLogic</em></p>
<p>In Melbourne, the median time on market is currently recorded at 38 days and in regional Vic it is recorded at 41 days.</p>
<p>In Melbourne, the days on market is trending higher, it is much higher than the 23 days a year ago and the highest it has been since March 2016.</p>
<p>In regional Vic the days on market figure has been trending lower and is down from 49 days a year ago, highlighting the strengthening of housing market conditions in regional Vic as the Melbourne housing market slows.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%205.JPG" alt=""></p>
<p><em>Source: CoreLogic</em></p>
<p>Throughout Queensland, properties are taking longer to sell than they were a year ago.</p>
<p>In Brisbane, the median days on market is currently recorded at 53 days which is the longest it has taken since February 2013 and has increased from 37 days a year ago.</p>
<p>In regional Qld it is typically taking 69 days to sell a home, up from 55 days a year ago with the 69 days the longest it has taken to sell since February 2016.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%206.JPG" alt=""></p>
<p><em>Source: CoreLogic</em></p>
<p>As at October 2018, the median time on market for Adelaide was recorded at 42 days and in regional SA it was recorded at 93 days.</p>
<p>As the chart shows, the days on market figure for Adelaide is trending lower and is down from 55 days a year ago.</p>
<p>In regional SA, days on market has begun to trend higher over recent months however, it is lower than the 102 days it was typically taking a year ago.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%207.JPG" alt=""></p>
<p><em>Source: CoreLogic</em></p>
<p>Perth properties were typically taking 63 days to sell over the three months to October 2018.</p>
<p>The days on market figure for the city is trending higher and is up from 56 days over the same period in 2017.</p>
<p>In regional WA, the days on market figure has been trending higher over recent months however, it is unchanged from a year ago with the median currently recorded at 82 days.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%208.JPG" alt=""></p>
<p><em>Source: CoreLogic </em></p>
<p>Properties that transact in Hobart are continuing to sell quickly however, there has been a fairly steep rise in days on market over recent months.</p>
<p>Properties in Hobart took 25 days to sell over the past three months, up from just 10 days a year ago and a recent low of 9 days during a number of months over the past year.</p>
<p>Properties are taking much longer to sell in regional Tas at 45 days however, the days on market figure has fallen from 53 days a year ago.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%209.JPG" alt=""></p>
<p><em>Source: CoreLogic</em></p>
<p>With the ongoing weak housing market conditions properties take a long time to sell across NT.</p>
<p>The small volume of sales also creates volatility in the days on market figure.</p>
<p>In Darwin, it currently takes 90 days to sell a property compared to 100 days a year ago.</p>
<p>In regional NT, it was taking 66 days a year ago which was a shorter days on market than the 74 days currently.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%2010.JPG" alt=""></p>
<p><em>Source: CoreLogic </em></p>
<p>Over the three months to October 2018, the median days on market for a Canberra property was 43 days.</p>
<p>The days on market for the city was higher than the 37 days it took at the same time last year.</p>
<p><img src="https://www.urban.com.au/images/2018/11/29/DOM%201.JPG" alt=""></p>
<p><em>Source: CoreLogic</em></p>
<p>Across the nation, the data shows that the trend is towards properties typically taking longer to sell.</p>
<p>This is reflective of the weaker housing market conditions whereby dwelling values are falling with growth slowing in most regions, transaction volumes are lower and the overall stock available for sale continues to climb which provides buyers with more choice and less urgency.</p>
<p>With credit conditions much tighter than they have been over recent years accessing finance is tougher which is a major contributor to weaker overall conditions.</p>
<p>As a result of these trends, it is expected that the median days on market figure will continue to trend higher over the coming months as vendors of ’stale’ inventory eventually adjust their price expectations lower or withdraw their property from the market.</p>
<p><em><strong>CAMERON KUSHER </strong>is a property research analyst for CoreLogic.</em></p>
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ckusher-ujnxiKuFQs

Selling conditions weaken as inventories rise and buyer activity fades: Cameron Kusher

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<p>Shallow research leads to misinformed real estate consumers and bad investment decisions. It’s important for investors to look beyond the veneer research published in mainstream media and dig a little deeper.</p>
<p>I’m alarmed at the number of consumers I encounter who think absorbing headlines and sound bytes constitutes research.</p>
<p>Their knowledge is paddling-pool shallow and they don’t know it. Their view of real estate markets is the one economists get from the 45<sup>th</sup> floor of a Martin Place office building. Australian property values rose 9.8% in the past year. Residential vacancies are 2.3%. First-home buyers can’t afford homes because the Sydney median is a million dollars.<span style="line-height: 1.3em;"> </span></p>
<p>Mainstream media gives you little more than generalised numbers. A single figure describes the entire market is a large capital city. It’s meaningless at best and dangerously misleading at worst.<span style="line-height: 1.3em;"> </span></p>
<p>The generalised number for Brisbane vacancies is around 2.5%. No worries. And a newspaper article recently quoted a “research report” claiming the city will run out of apartments to sell in five months. Other articles have said developers are making lots of off-the-plan sales. </p>
<p>Great, let’s buy an inner-city unit in Brisbane.</p>
<p>Looking a little deeper, all the inner-city suburbs of Brisbane have vacancies in the 4-5% range. And that’s before the new developments now under construction or being marketed off-the-plan are completed and dumped in the rental pool.</p>
<p>If you get a copy of the afore-mentioned “research report”, you find that the people marketing the apartments are the same people who wrote the report – and some very creative accounting has been used to come up with the very self-serving conclusions.</p>
<p>Hunt around a little more and you will find independent research showing that 90% of Brisbane inner-city units are being sold to investors, and most of them are distant investors. The new high-rise apartments are not being built to service local demand. </p>
<p>There’s also independent research indicating that the claims made by developers and marketers about pre-sales are largely false – or, at best, exaggerated.</p>
<p>The bottom line for buyers: it matters not whether every planned apartment in Brisbane gets sold. What matters is whether there’s rental demand for them. A market with empty apartments loses value dramatically. That’s why Surfers Paradise apartments are worth less than 10 years ago.</p>
<p>The veneer research numbers say buy a Brisbane unit. The deeper research says run away as fast as you can.</p>
<p>You can be forgiven for thinking not much is happening in Adelaide’s market. The latest generalised number says house prices have risen only 2.7% in the year to 30 June. Put that together with the vague impression you have about South Australia lacking population growth and economic vitality and you might conclude Adelaide’s not worthy of your attention.</p>
<p>The reality is quite different. There’s considerable momentum in the Adelaide residential market – it’s just that the single figure used to describe this market doesn’t reflect the rising sales activity.</p>
<p>Nor does it describe the many suburbs which have recorded double-digit rises in their median house prices in the past 12 months.</p>
<p>There are suburbs right across the metropolitan area, and across all price spectrums, which have recorded growth ranging from 10% to 18%.</p>
<p>Many of the locations with the strongest growth are middle-market areas, suburbs with median prices in in $500,000s, $600,000s and $700,000s – among them Glenelg East (up 17%), West Lakes (up 14%) and Cumberland Park (up 15%).<span style="line-height: 1.3em;"> </span></p>
<p>Among the best has been Cheltenham, where the median price has increased 21.5% to $540,000. It’s part of the municipality of Charles Sturt in the middle-market western suburbs of Adelaide.</p>
<p>The Charles Sturt LGA is the leading precinct of Adelaide in terms of the number of suburbs with rising sales activity – indeed, it’s currently one of the best in Australia.</p>
<p>But if you simply glanced at the generalised price growth figure for Adelaide overall, and dismissed its prospects, you would never know there’s an outstanding growth market hidden beneath the figures.</p>
<p> </p>
<p><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
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terryryder-YECXbqmri2

Shallow research leads to misinformed real estate consumers: Terry Ryder

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<div>Last week the ABS Job Vacancies series recorded New South Wales vacancies at an all-time high driven by positions in the services sector, which bodes well for Sydney employment growth.<br><br>Indeed, Sydney's economic dials have all been switched to hot for a long time now. </div>
<div> </div>
<div>ANZ released its job advertisements dat<a href="https://www.media.anz.com/phoenix.zhtml?c=248677&amp;p=irol-jobad&amp;nyo=0" target="_blank">a</a> for September which showed a seasonally adjusted +3.9% jump following on from a +1.3% lift in August. </div>
<div> </div>
<div>This was the strongest monthly gain in 15 months and the trend estimate has now been rising since November 2013.</div>
<div> </div>
<div><a href="/images/2015/10/07/ANZ.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/10/07/ANZ.jpg" alt=""></div>
<div>
<div>ANZ noted that the series now appears to be stronger than had previously been thought, and that the economy seems to be adjusting relatively well to the decline in mining investment.</div>
<div> </div>
<div>In other news the FCAI reported that an all-time record 1,143,104 new motor vehicle vehicles for the year to September after a +6.8 per cent year-on-year jump in the month.</div>
<div> </div>
<div>With the services PMI gauge also recording a fourth month of expansion for the first time since March 2008 (following on from a 7 year high reading last month), interest rates will be left on hold this week. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
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pwargent-M4siyDbqQY

Job ads biggest jump in 15 months: Pete Wargent

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<p><span>'Tis an odd thing, by but the </span>Detailed Labour Force<span> figures are so often overlooked or ignored by market commentary, though fortunately not by everybody. Here's ex-Reserve Bank boffin and now ANZ market economist Justin Fabo.</span></p>
<p><a href="/images/2015/10/26/Fabo.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/Fabo.jpg" alt=""></span></p>
<p> </p>
<div>Indeed so, the employment data has improved significantly for Brisbane over the year to September 2015. Let's take a look at the latest figures in 3 short parts.</div>
<div> </div>
<p><strong><span style="text-decoration: underline;">Part 1 - Large states</span></strong></p>
<div> </div>
<div>Most employment growth over the last 12 months has taken place in Sydney (+68k) and Melbourne (+55k)...but lookee here, because hey presto, regional New South Wales is now creating jobs again (+55k)!<br><br>Regional New South Wales has seen jobs created particularly in Newcastle &amp; Lake Macquarie, the Hunter Valley and the Illawarra. On the other hand regional Victoria has seen total employment decline.</div>
<p><a href="/images/2015/10/26/LF1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/LF1.jpg" alt=""></p>
<p><span>Looking at employment growth cumulatively in the two most populous states, we can see that the outlook in regional New South Wales has certainly improved, although the most employment is still created in the Greater Metropolitan area. </span></p>
<p><a href="/images/2015/10/26/LF2.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/LF2.jpg" alt=""></span></p>
<p> </p>
<p><span>Better still, the total figures reported for regional unemployment now seems to be declining again after a worrying surge through 2014.</span><br><br><span>This represents evidence that at least some of the fallout from mining and construction contract layoffs is now in the rear view mirror, at least from an employment perspective. While aggregate demand may still be in declining in some mining regions, many of those contracted for the construction phase of mining projects have now returned to the capital cities. </span></p>
<p><a href="/images/2015/10/26/LF3.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/LF3.jpg" alt=""></span></p>
<p> </p>
<p><strong><span style="text-decoration: underline;">Part 2 - Brisbane bounce</span></strong><br><br></p>
<div>The other location which created a material number of jobs over the past year was Brisbane (+34k).<br><br>In fairness - while not charted here due to immateriality - Hobart's small labour market has also been picking up very nicely (+3k).<br><br>Not so much doing elsewhere.</div>
<div> </div>
<div><a href="/images/2015/10/26/LF4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/10/26/LF4.jpg" alt=""></div>
<div> </div>
<div><span>Piecing the jobs growth data together, over the past year the growth in employment has been almost entirely accounted for by Greater Sydney (30 per cent), Greater Melbourne (25 per cent), Greater Brisbane (15 per cent), and regional New South Wales (24 per cent).</span></div>
<div><span> </span></div>
<div><a href="/images/2015/10/26/LF5.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/10/26/LF5.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Part 3 - Unemployment dispersion</span></strong><br><br><div>The dispersion of unemployment rates across Australia continues.</div>
<div> </div>
<div>Amazingly enough Hobart recorded an unemployment rate of just 4.9 per cent in September, a remarkable turnaround as the Aussie dollar has depreciated, evidently boosting the local economy.<br><br>Unemployment has also declined steadily in Greater Brisbane (5.4 per cent) and Melbourne (6.3 per cent).<br><br>Meanwhile in Greater Sydney unemployment remains relatively low (5.3 per cent), though the Sydney result has been skewed higher by rising unemployment rates on the Central Coast, and in Blacktown.</div>
<div> </div>
<div>On the other hand, Perth (6.1 per cent) and Adelaide (7.6 per cent) have unemployment rates that remain in a clear uptrend.<br><br>Smoothing the original data on a rolling annual basis reveals the dispersion more clearly, with Hobart, Brisbane, and Melbourne showing the greatest improvement.</div>
<div> </div>
<div><a href="/images/2015/10/26/LF6.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/10/26/LF6.jpg" alt=""></div>
<div> </div>
<div>
<div>I've been concerned about unemployment rates in a number of regional centres of the last year or two, so it has been pleasing to see the reported unemployment rates falling sharply in cities such as Geelong (4.8 per cent), Newcastle (5.1 per cent), the Hunter (7.3 per cent), though unemployment rates remain too high for comfort in a number of Queensland regions.</div>
<br><div>Greater Brisbane's unemployment rate has ticked down to 5.9 per cent on a 12mMA basis after some elevated readings at the beginning of 2015, despite an unemployment rate of above 9 per cent in Logan-Beaudesert.</div>
<p><a href="/images/2015/10/26/LF7.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/LF7.jpg" alt=""></p>
<p> </p>
<p><span>On the other hand Greater Adelaide's unemployment rate is now tracking consistently at around 7.6 per cent or above, and has ticked up to 7.3 per cent on a 12mMA basis. </span></p>
<p><a href="/images/2015/10/26/LF8.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/LF8.jpg" alt=""></span></p>
<p><span> </span></p>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
<p><span> </span></p>
</div>
</div>
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