In part three of our property market drivers series, we explore the impacts that jobs and unemployment may have on determining property values.
Defining jobs and unemployment
Jobs and unemployment data track both the number of newly created jobs and current unemployment levels in a population. In simple terms, the more new jobs created, the more likely it is for people to move to an area for work – that leads to a growth in population. Stable employment levels mean many individuals feel confident with a steady income and have the ability to afford a mortgage or rental payments – increasing demand for property.
Understanding the impacts of COVID-19
The whole of Australia is currently facing unexpected job losses due to the COVID-19 pandemic. In WA alone, there have been over 60,000 jobs lost, mostly in industries profoundly affected by lockdown measures, such as hospitality. However, there are some silver linings for Perth and WA’s job market. The mining industry has seen steady demand even during the pandemic, which is positive for the resource-rich state.
Using this information to your advantage
Under normal circumstances, a high unemployment rate may influence supply and demand for property, with fewer people able to afford homes and some even having to sell or downsize. Low demand periods can be an opportune time to invest as prices are, in some locations, competitive due to more properties on the market for sale.
In the current circumstances, that we have never faced before on such a global scale, it is hard to predict precisely how the property market will react in the long term. Some property experts predict competition in the apartment and small homes sector as downsizing becomes a viable option for many who are exploring ways to lower their costs of living.
Government incentives can stimulate demand for housing by making it more affordable. For example, the First Home Loan Deposit Scheme offers subsidised loans with a new allocation of 10,000 grants available for the new financial year, that began July 1. Incentives trigger a response by first home buyers who enter the market.
Where to find relevant data
Jobs and unemployment data are most accurate coming from government organisations such as the Australian Bureau of Statistics. Another research option is reputable private companies, such as Deloitte’s, who produce reports on the impacts of the current pandemic.
Navigating the property market with Norm Carey
With more than 30 years of experience developing a portfolio of over 100 completed projects valued at over $2bn, a seasoned developer such as Norm Carey can help you navigate the complexity of the property market. Visit our blog for more news on real estate in Perth or contact our team for expressions of interest on new and upcoming projects.
Enjoyed this blog? Read next:
- Downsizing in Perth: The Generations Choosing Simpler Living
- Should You Rent a Smaller Home Before Buying Your Downsizer?
- Why Green Spaces Are Essential in Our Community
 Deloitte Access Economics, WA Economic Outlook: Time to steepen the economic curve, May 2020