Economist | Housing | Economy
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What are the current trends in the Australian housing market?
It's the Real Estate Podcast brought to you by Ray White, the largest real estate and property group in Australasia.
And welcome to another episode of the Real Estate Podcast available on iHeartRadio, also on Spotify and Apple Podcasts or wherever you get your podcasts from. Well, it's a Thursday, the 7th of April for 2022. And coming up, we're talking with an economist about the unemployment rate, oil prices, the cash rate and wage growth. And we certainly know that there's a general election coming up. Scott Morrison was in the thick of it last night in the Edgeworth Tavern with some locals giving the PM an airful of what they thought about him, including a woman who asked Morrison for a selfie and then shot the video of him smiling with her and her saying, congratulations, you are the worst prime minister we've ever had.
I guess regardless of your political persuasion, she certainly made her feelings known. And love or hate social media, there is going to be a whole lot more of this leading up to the general election. And firstly, looking at Sydney expecting rain, possibly at times heavy with 22 degrees. Melbourne, partly cloudy with 24.
How is the unemployment rate affecting wage growth?
Brisbane expecting a shower or two with 28 degrees. And in Perth, expecting a mainly fine day with 32 degrees.
We feature market updates, interviews and trends. It's your real estate podcast for breakfast.
We are talking with ANZ senior economist Adelaide Trimbrill to find out her thoughts about some of the housing market news and other things that are going on. Good morning, Adelaide. Good morning. Nice to have you on the show. Well, unemployment rates are falling, less people applying for jobs, which presumably accelerate wage growth for 2022. How do you see that going for people getting a bit of a bump in their wages and therefore a bit more bankable income for a house deposit, which has got to be good news, fingers crossed?
What impact will cash rate increases have on the housing market?
Yes, it is good news. And we do see the unemployment rate continuing to fall. We should note that it's already around 4%, which is over a full percentage point lower than what we saw before COVID. So we are in a much stronger labour market now than we were before all those lockdowns started. And I think the economy in a lot of ways is going a lot better than back in 2019. So there's a lot to be said about, you know, how many people have jobs and the fact that there's still really strong demand for extra workers as well. And the fact that we've got low unemployment that's going to go lower and lots of employers looking for extra workers does mean that we will eventually see wages growth rise. What's going to make it a bit slower than what we might see in other countries compared to Australia is that Australia has some slow wage processes, by which I mean we've got a lot of people on enterprise bargaining agreements, which means that it can take a while for some wages to go through.
But what we are seeing is people are switching jobs to get a rise in the paychecks.
Why are oil prices a concern for the economy?
And between that and the very, very strong household savings that a lot of people have built up over the last two years being in lockdown, has really helped with deposits on both sides.
And I wonder if the year 2022 is the year that the public gets sick of hearing the words a cash rate increase, because I reckon I've heard that already a few times too many in 2022. And talking of that, when do you think the cash rates may start to kick in and bite?
It's going to happen very soon, we think. So the ANZ forecast is that we will see the first cash rate hike in June. Then we'll see two more in July and August and another one in November. So the cash rate in Australia is currently 0.1%, but by the end of the year, we are now expecting it to be up at 1%. this is a pretty big and fast increase in the cash rate after not having an increase in the cash rate in Australia since around 2009, 2010. But because a lot of households, particularly those households with debt, do have huge savings buffers, this shouldn't create any big problem in the housing market, certainly not in terms of
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Chapters
7 chapters
1
What are the current trends in the Australian housing market?
0:02–1:23
2
How is the unemployment rate affecting wage growth?
1:23–2:11
3
What impact will cash rate increases have on the housing market?
2:11–3:15
4
Why are oil prices a concern for the economy?
3:15–4:29
5
How are household savings influencing home buying?
4:29–5:35
6
What are the implications of the government's first home buyers scheme?
5:35–6:56
7
How will rising cash rates affect borrowing capacity for home buyers?
6:56–9:49
Speakers
3 identifiedMore from Aussie Real Estate Podcast
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