While there are many factors that influence property price movement, a change in local economic conditions is one of the most influential factors. Hobart’s spectacular turnaround is possibly the best case-study which illustrates that.
Put simplistically, wherever there’s an increase in jobs there’ll be an increase in demand for housing. To help you follow the money trail, this report contains a state-by-state analysis of Job Vacancy trends (a leading indicator for an improving economy).
New South Wales has continued its consistently strong rate of job vacancies, a run that commenced in early 2013, also the start of Sydney’s property boom. 296,000 job vacancies during the 2017 calendar year and 82,400 in the August 2018 quarter are both all-time records.
Victoria job vacancies has followed a very similar (strong) trajectory, starting its run one year later than New South Wales. Victoria job vacancies are also in record territory.
Queensland and Western Australia’s job vacancies took a nose dive following the late-2012 commodity price downturn. Both trend lines have been largely flat over the last few years, with mild improvement since mid-2017. WA appears to be gaining some nice shape recently.
There’s been an impressive recent bounce in South Australia’s job vacancies. It’s noted that a 16-year reign by the same state government ended in March 2018. Perhaps that old adage “a change is as good as a holiday” is paying dividends?
Job vacancies in Canberra has progressively increased from 4,800 in February 2016 to 7,400 in August 2018. It’s no coincidence that Canberra’s property market over the last few years performed better than most, including Propertyology, anticipated.
It’s not that long ago when (in 2014) Tasmania’s unemployment rate was 2 per cent above the national average. Following some lumpy years of improvement from mid-2014 onwards, the last 18 months has been particularly solid while the 3,000 job vacancies as at August 2018 is the state’s highest in 18 years.
Finally, the Northern Territory – what a roller coaster! What a shame – it has so much potential.
Looking specifically at the most recent variation in job vacancy volumes, the Australian economy continues to look solid with a record 793,800 jobs vacancies created in the 2017 calendar year, while the August 2018 figure is 16 per cent higher than 12 months earlier.
WA was the biggest improver with a 43 per cent increase, while SA (30 per cent), Victoria (28 per cent) and Tassie (20 per cent) are also shining.
The economy in the Top End remains a significant concern and is the main the reason why, late last year, Propertyology forecast an acceleration of property price declines in Darwin in 2018.
And then there’s Queensland. Despite many people from 2014 onwards predicting that ‘Brisbane’s property market is about to boom’, dwelling price growth will remain stuck in first gear until such time as the state’s economic engine finds another gear. Job vacancies is one of several metrics that continuously underwhelms me about my home state.
As at August 2018, there was an impressive 218,000 jobs being advertised across Australia. The nation’s highest volume of job vacancies was within Administration (46,700 jobs) followed by Professional & Scientific (28,900 jobs). Australia’s Health & Social Welfare sector continues to expand, indicative of both our growing and aging population and the new NDIS scheme.
When we analysed the percentage change in job volumes for each industry across the previous 12 months, there are some interesting observations:
- 37 per cent growth in mining is indicative of the sustained improvement of commodity prices that has led to an increase in production of the likes of coal, iron ore, gold and others. Central Queensland and Perth will be the biggest beneficiaries of this trend which most pundits anticipate will continue;
- While manufacturing job vacancies showed a net decline, one can’t help but feel that plant closures by Ford, Holden and Toyota at the start of the reporting year are affecting this. In fact, parts of Australia’s manufacturing sector are expanding significantly, especially food manufacturing and (watch this space) thousands of new positions associated with manufacturing of Australia’s new $200 billion defence force fleet;
- One suspects that a reasonable portion of the ‘Other Industries’ in the chart below is agriculture – a sector which, drought aside, has an exciting future in this country;
- Wholesale and Transport & Warehousing are both expanding and often feed off the manufacturing sector;
- No doubt the numerous wind, solar and assorted renewable energy projects across many parts of regional Australia is contributing towards the 28.6 per cent growth in electricity job vacancies;
- There’s been a 28 per cent increase in job vacancies for the often under-estimated Arts & Recreation sector (refer ‘tourism boom’). I’m not at all surprised given the wonderful initiatives that I’ve seen firsthand through discussions with various local governments and community stakeholders during my research field trips throughout various parts of Australia.
Propertyology is a Brisbane-based buyers agency and (national) property market research firm. We help everyday people to invest in strategically-chosen locations all over Australia. Our buyer’s agents are actively investing in several exciting locations in various states. Like to know more? Contact us here.