Market Trends

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<div>EXPERT OBSERVER</div>
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<div>Plenty of people bemoaned the record low nominal growth in Australia's wage price index in calendar year 2019, myself included.</div>
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<div>Through a prolonged period of high levels of immigration the workforce has clearly become more casualised, and there's been widespread underutilisation as well as wage theft. </div>
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<div>On the other hand, the latest average weekly earnings figures show that there are still plenty of dollars sloshing around some parts of the economy. </div>
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<div>Over the year to November 2019 there was +3.3 per cent growth in average weekly earnings, driven by solid +3.4 per cent growth for full-time employees in the private sector.</div>
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<div>That's well ahead of the rate of inflation of about +1.8 per cent. </div>
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<div>Full-time ordinary time earnings for males increased by +3.2 per cent, which is plenty better than some of the numbers we've seen for men in recent years (while the equivalent figure for females was robust at +3.5 per cent):</div>
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<div class="separator"><img src="https://1.bp.blogspot.com/-SyB2L8bRUVA/Xk-vRpxsMqI/AAAAAAAA0XE/Lrn-C_wEfMMYQdySez7wuAk_1sGGaTOBQCNcBGAsYHQ/s640/A1.jpg" width="640" height="368" data-original-height="809" data-original-width="1404"></div>
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<div>For average<em> total </em>male earnings there was very solid growth in Victoria (+5.5 per cent) in particular, as well as in New South Wales (+3.8 per cent). </div>
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<div>In the mining boom glory years male workers drew in extremely strong rates of pay in the Top End - I even lived in Darwin myself for a short time - but those days have long gone, and many workers are leaving the Northern Territory as gravity and mean reversion take hold. </div>
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<div>You can click on the below chart to see how male full-time total earnings have progressed over time by state and territory, with the impact of the end of the mining construction boom in evidence for the resources state figures:</div>
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<div class="separator"><a href="https://1.bp.blogspot.com/-LpcNpSshjJY/Xk-vRkHSG3I/AAAAAAAA0XI/zeb15JHAWVYEvQdg4c7c9SS3fPKL6JzKgCNcBGAsYHQ/s1600/A2.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-LpcNpSshjJY/Xk-vRkHSG3I/AAAAAAAA0XI/zeb15JHAWVYEvQdg4c7c9SS3fPKL6JzKgCNcBGAsYHQ/s640/A2.jpg" width="640" height="384" data-original-height="826" data-original-width="1371"></a></div>
<p><strong><span style="text-decoration: underline;">Sector trends</span></strong></p>
<div>Overall, average weekly earnings increased by +3.2 per cent over the year to November 2019 to a new high of $1,659, which was a stronger result than the +2.5 per cent seen a year earlier.  </div>
<p><img src="https://1.bp.blogspot.com/-spjyzBpAnJg/Xk-vRtX1rBI/AAAAAAAA0XM/ri4qmweXsLQdjer9sPAvNXGfMAHXfkgXgCNcBGAsYHQ/s640/AWE.jpg" width="640" height="636" data-original-height="809" data-original-width="814"></p>
<div>Thus while growth in the wage price index has been benign, it's clear that some earners and sectors have been faring reasonably well. </div>
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<div>Higher income earners may include healthcare specialists, construction workers and project managers, engineers, and some of those in tech roles...especially employees based in Melbourne and Sydney. </div>
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<div>Indeed, construction topped the industry sectors for adult ordinary time earnings in 2019, with major infrastructure projects seeing some big pay packets being offered, including in inner-city Brisbane. </div>
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<strong>PETE WARGENT</strong><em> is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em>
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Important market trends investors should keep an eye on: Pete Wargent

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<p>Recent research conducted by Knight Frank's partner and head of research, Michelle Ciesielski observes a shift in the narrative from downsizing to rightsizing due to changes in the lifestyle trend towards apartment living.</p>
<h2>Trends to Monitor</h2>
<p>The 'Australian Prime Residential Insight 2020' outlines some of the trends that are expected to influence the rightsizer prime luxury market in the coming years. </p>
<h2>1. 'Active Retired' Transforming the Retiree Lifestyle</h2>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/2/3/14_Active%20Retired%20Group.jpg" alt=""></p>
<p>Unlike past generations, the 'Active Retired' group hold a passport with many stamps, they are educated, willing to engage in smart technology and encouraged the change in definition for their next home purchase to 'rightsize' rather than 'downsize'. </p>
<h2>2. Baby Boomer Voice Growing </h2>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/2/3/14_Baby%20Boomers.jpg" alt=""></p>
<p>The baby boomer group comprised 23.5 per cent of the Australian population in 2016, growing from 21.7 per cent five years earlier. </p>
<p>In 2020, the youngest baby boomer turns 56 years old and the oldest turns 74 years old. </p>
<h2>3. Under-Supplied Prime Suburbs</h2>
<p>The portion of three-bedroom and above dwellings due for completion by 2022 is increasing to 71 per cent in medium density, and to 18 per cent for high-density dwellings. </p>
<p>The next trend to watch is the total number of dwellings being completed with 47 per cent less medium-density dwellings due between 2020 and 22, compared to 2017 and 2019, and 30 per cent less being built as high-density dwellings. </p>
<h2>4. Collaborate, Community, Belonging </h2>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/2/3/14_Collaborate.jpg" alt=""></p>
<p>More emphasis on creating agile collaborative zones within the amenities to ensure they carry significance to the residents and can be adapted for alternate uses at other times of the day. </p>
<h2>5. Clever Spaces</h2>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/2/3/14_Crown%20Residences%202.jpg" alt=""></p>
<p>Source: <span>Crown Residences at </span><span><a href="https://onebarangaroo.com.au" target="_blank"><span>One Barangaroo</span></a></span></p>
<p>Drawing inspiration from the most exclusive hotels and residences from around the world will continue to nurture the redesign of luxury apartments and allow residents to be more agile and minimise ineffective space. </p>
<h2>6. Rise in Lateral Living </h2>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/2/3/14_Lateral%20Spaces.jpg" alt=""></p>
<p>Source: Liverpool/ <a href="https://www.lateralestate.com/libertytower" target="_blank">Lateral Estate</a>.</p>
<p>Buyers are prepared to pay a premium for a lateral apartment, designed to span the entire floorplate offering the closest replica of a freestanding house in the sky, although with absolute privacy. </p>
<p>It can enable the most resilient security, with direct lift access, from the secured basement carpark, to the single-leveled residence. </p>
<h2>7. More Branded Residences</h2>
<p>With rapid expansion of over 400<a href="https://content.knightfrank.com/research/1617/documents/en/global-branded-residences-2019-5874.pdf" target="_blank"> branded residences</a> globally, a growing number of developers and hotel groups are looking to capitalise on this opportunity in Australia.</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/2/3/14_branded%20residence.jpg" alt=""></p>
<p>Source: Branded Residence Report 2019/ <a href="https://content.knightfrank.com/research/1617/documents/en/global-branded-residences-2019-5874.pdf" target="_blank">Knight Frank.</a></p>
<p>A branded residence is traditionally a hotel-led development with integrated or linked residences. For instance, <a href="https://iconprivateresidences.com/category/luxury-developments/four-seasons" target="_blank">Four Seasons</a><span>, </span><a href="https://iconprivateresidences.com/category/luxury-developments/aman" target="_blank">Aman</a><span>, </span><a href="https://iconprivateresidences.com/category/luxury-developments/ritz-carlton" target="_blank">Ritz-Carlton</a><span>, </span><a href="https://iconprivateresidences.com/category/luxury-developments/mandarin-oriental" target="_blank">Mandarin Oriental</a><span>, </span><a href="https://iconprivateresidences.com/category/luxury-developments/oneonly" target="_blank">One&amp;Only Resorts</a><span>, </span><a href="https://iconprivateresidences.com/category/luxury-developments/rosewood" target="_blank">Rosewood</a><span> and </span><a href="https://iconprivateresidences.com/category/luxury-developments/six-senses" target="_blank">Six Senses</a><span> are among the most active in the segment, others have aligned with luxury brands as diverse as Versace, Porsche and Armani.</span></p>
<p>They naturally benefit from the quality hotel brand, smooth management and luxury services. </p>
<h2>8. A Small World</h2>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/2/3/14_Small%20World%20Qantas.jpg" alt=""></p>
<p>Source: 'Qantas flew non-stop from London to Sydney in less than 20 hours'/ <a href="https://www.qantas.com/travelinsider/en/trending/london-sydney-non-stop-long-haul-qantas-flight-project-sunrise" target="_blank">Qantas</a>.</p>
<p>Qantas tested its new 19-hour nonstop flight from London to Sydney in late 2019. This may be operational by 2022. </p>
<p>Improved connectivity has potential to reshape the second home market. This could result in an increased competition with offshore buyers, and encourage rebalancing property portfolios with Australians likely to buy more second homes abroad. </p>
<h2>9. Reducing space and footprint</h2>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/3_StockBreakouts/house-in-hands-july-31-brekaout.jpg" alt=""></p>
<p>More buyers and developers are becoming increasingly aware of the carbon footprint they leave behind for future generations. </p>
<p>This was revealed in the recent research conducted by Stockland Research. It was predicted that Australians have <span>a strong desire for more social connectivity and sustainable home features becoming standard.</span></p>
<p>Read more: <a href="https://www.urban.com.au/news/109279-how-will-we-live-over-the-next-decade-stockland-research" target="_blank">'How will Australians live over the next decade, Stockland Research'</a></p>
<p>They are committing to better sustainability practices and design for apartment living. </p>
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