The sale of New Motor Vehicles is often a good measure of where the economy is at and what businesses and individuals are thinking in terms of reasonable sized investments. Recent data suggests that things are going sideways in broad terms, however the stand out has been the ACT, the only State to record an increase over the previous month in both Trend (0.9%) and Seasonally Adjusted (1 .6%) data. When consideration is given to the same period last year, the big loser was Tasmania having fallen by 1 1 .6% on trend and 1 2.1% on seasonally adjusted data.
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The news keeps getting better on the interest rate front, however for all of the wrong reasons. We recently noted that Australian building approvals had come off, only marginally in housing by 0.3%, however private sector accommodation excluding housing had declined by a very significant 14.0% in seasonally adjusted terms.
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Whilst the Reserve Bank has noted that residential prices have seen significant growth, a word that should be starting to announce what frame of mind they’re in, there would be genuine concern around the decline in dwelling finance approvals. This is a part of the economy that the RBA would desperately like to see improve, however concern still arises out of higher unemployment rates.
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If you think Gladstone is a mining town, you'd be wrong. Over 95% of the population is employed outside of mining. The unemployment rate is 3.5%, well below the State average of 5.9%. Whilst there is no doubt that a price correction in housing has occurred, many desktop analysts fail to see Gladstone for what it really is, an industrial port city.
Perhaps one other interesting piece of information, the majority of Gladstone's real estate agents actually have vacancy rates for housing at less than 5.0%, a far cry from the 12.0% plus being listed by others.
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The first home buyers market will remain challenging throughout 2014. In fact it could get worse as the market rebounds with additional pressure coming to bear on both houses and apartments as investors and second home buyers buy up. Both of these buyers have a capacity and an appetite. However, there are some real winners that could emerge in 2014 for First Home Buyers.
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This week the ABS released the quarterly weighted average house price data series for Australia’s capital cities. All the media hype surrounding a property boom appears to be largely that, hype. Now don’t get me wrong, it is great to see the media in a positive frame of mind about the property sector, because clearly it has been years since we have seen that.
However the most recent statistics demonstrate that the property recovery is still in its infancy in many centres and with the exception of Sydney (3.6% Qtr or 11.4% p.a), and some may argue Melbourne, is still relatively fragile.
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