Employment stability, job creation initiatives and a city’s overall economic strength are the single most important factors for a city’s property market performance.
Over the last 6 years to June 2025, Australia created a phenomenal 1,799,000 extra jobs, expanding the national workforce by 14 percent to 14.6 million.
Collectively, employees across Australia were paid wages worth an all-time record high $1.218 trillion last financial year, a 5.3 percent increase on the nation’s total wage bill from a year earlier.
The strength of a city’s labour market is significantly more influential to real estate values than population growth or the upward trajectory of interest rates and inflation.
Put simply, a city’s the economic strength provides household confidence and financial capacity. That enables materialisation of the aspirations of first homebuyers, home upgraders, people moving town for career advancement, and the wise ones who exercise discipline to invest in their financial future.
It is no coincidence that Australia’s best performed property markets in recent years have been within the states of Queensland (20 percent increase in job volumes), Western Australia (19 percent) and South Australia (nation-leading increase in State Final Demand).
The combined capital city median house value increased by 55 percent over the last 6-years, whereas 100 percent capital growth was produced in cities such as Fraser Coast, Townsville, Toowoomba, Gold Coast, Geraldton, Albany, Busselton, Mount Gambier, Copper Coast, Strathalbyn and Murray Bridge.
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Conversely, financial mismanagement continues to produce many years of underwhelming economic results in Victoria and Northern Territory.
Over the last 6-years, private sector jobs in Victoria increased by a modest 11 percent. The state government cooked the books by inexplicably adding 26 percent public sector jobs, which recklessly increased the public sector wage bill by a massive 49 percent.
Last year alone, Victorians shelled out $46 billion on public servant wages.
Melbourne’s pathetic 10 percent capital growth rate over the last 8-years and Darwin’s 20 percent house price increase over the last 15-years are the worst performed property markets out of 400+ townships across Australia.
Other jurisdictions that enjoyed thriving local economies and a capital growth rate of circa 80 percent over the last 6-years included Adelaide, Albury-Wodonga, Brisbane, Burnie, Cairns, Margaret River, Perth, Sunshine Coast, Wagga Wagga.
Scratching beneath the surface
There are a series of factors which Propertyology uses to evaluate economic conditions of each of Australia’s cities and towns. Some are leading indicators while others are lagging.
Here are a few current observations from our daily research activities:
- Australian Capital Territory
Out of the total 385,900 jobs Australia-wide with the federal government, a staggering 117,000 of them are in Canberra. When ACT government jobs are included, 56 percent of Canberra’s total workforce are government employees. Of considerable concern is the decline of 20,600 (or 15 percent) in private sector jobs over the last 6-years. No wonder Canberra’s current median house value is still 5 percent below its peak from 3.5 years ago. - Western Australia
Was the nation’s best-performed state economy in 2024/25. With 25 percent of total state government revenue coming from mining royalties ($10-$15 billion in its strong years), conditions can quickly flip. Decades of proof illustrates the very close connection between mining and WA property market performances. - Queensland
Produced the biggest increase in total job volumes (20 percent) and currently boasts Australia’s biggest pipeline of major projects. Regional Queensland is home to 48 percent of the sunshine state’s total workforce, confirming its status as Australia’s most decentralised state. - Tasmania
Was Australia’s strongest state economy for a few years until recent times. The state’s total workforce of 285,000 is 11 percent higher than 6-years ago. Tasmania’s strengths such as Agribusiness, cultural experiences and Science are uniquely world leading. - New South Wales
Employs 40 percent of Australia’s Media & Communications sector and 50 percent of the Banking and Insurance sector. Sydney’s economy has been mid-table for several years now, including a modest 10 percent increase in jobs over the last 6-years. Conversely, the economy of the Northern Rivers region in the state’s north continues to expand. For example, passenger volumes through the region’s biggest airport, Ballina, increased by 18 percent over the last 6-years (compared to a 4 percent decline for the combined capital cities). - Victoria
Officially has the lowest credit rating of any Australian state. The cocktail of sky-high taxes and diminishing business investment is reflected in its ankle-deep infrastructure pipeline, its bulging state government debt (close to $200 billion), and Melbourne’s pathetic property market. Sadly, Victoria’s economic road ahead will remain rough for some years yet. - South Australia
Was equal with WA with nation-leading economic growth in 2024/25 (State Final Demand was up 3 percent). SA keeps expanding its major events calendar and is producing strong growth from both the visitor economy and knowledge sectors. A strong vision and aspirational attitudes of key stakeholders is producing great things in Adelaide and parts of regional SA. - Northern Territory
Continues to be propped up by inexplicable increases in federal government jobs, similar to the ACT. To illustrate the Top End’s lack of industry, over the last 10-years to June 2025 the 3-levels of government collectively added 6,970 extra jobs while the combined private sector lost 4,430 jobs. Taxpayers paying the wages of 31 percent of NT’s total workforce is problematic.
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Pork-barrelling
Despite the huge increase in total jobs and an overseas migration intake of 1.6 million during the last 6-years, Australia has gone backwards in its battle to address the dire shortage of doctors, nurses, teachers, police officers and construction workers.
Total private sector jobs increased by 12 percent.
But taxpayers ought to be concerned that Australia’s total increase in jobs of 1,799,000 over the last 6-years was beefed up a whopping 27 percent extra public sector jobs.
Lies, damn lies and manipulating statistics to hide the truth is one of the very few things that politicians are good at.
The biggest chapter in the play book titled “Plonkers Who Play With Other People’s Money” is devoted to making things look better than what they are. The pork-barrelling tactic is to waste public taxes on paying for more bums to sit in seats only to push paper around.
The total annual wage bill for Australia’s public sector has increased by a disturbing 50 percent in just 6-years.
Reckless!
Last financial year alone, $250 billion of taxpayer funds was spent on public sector wages.
That’s $83 billion more than 6-years ago. Imagine how many new hospitals, highways and stadia could have been built with just half of that wasted spending.
The extra 550,000 public servant jobs created in just 6-years is equivalent to the entire combined workforces of Newcastle, Geelong and Mackay (3 of Australia’s 20 largest cities).
The credit card used by governments to pay for the pork-barrelling must eventually be paid back.
While recent announcements by the federal government (Defence spending reductions) and the Victorian government (cutting 1,000 public servant jobs) will do little to address the sizeable financial concerns, those announcements are a significant admission to the general public that their (self-inflicted) problems are BIG.
One of the unintended consequences when proper belt tightening occurs in future years is likely to be a period of below par property market performances in the relevant jurisdictions.
Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.
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