Economic conditions remain tough internationally as countries look to reverse the effects of the global economic downturn that started late in 2007. Some positive economic data domestically suggests the Australian economy has not only fared better during the downturn but is showing slight signs of a possible economic recovery during the last few months.
The latest ABS employment figures revealed the national unemployment rate increased to 5.8 per cent in June 2009 (a level not witnessed since October 2003), with the Victorian unemployment rate reaching 6.0 per cent for the month. Many market forecasts expect the unemployment rate to reach the 8 per cent mark sometime next year.
The Westpac – Melbourne Institute Consumer Sentiment Index increased by 9.3 per cent in July 2009 to 109.4 in seasonally adjusted terms. This is the second consecutive month that the indexe is above the 100 mark with four of the five indexes improving in July 2009.The current conditions index rose by 5.1 per cent for the month, while the expectations index rose by 12.0 per cent. An interesting note in the survey was that “This month’s survey was conducted in the week where ‘Fair Work Australia’ replaced ‘Work Choices’. Interestingly, the sentiment of respondents who would vote for the ALP was above 100 while the sentiment of respondents who would vote for the Coalition was below 100.”
The Australian dollar was trading at .8114 US dollars at close of business on the last day of the 2008-09 financial year. The May 2009 release of the federal budget does not appear to have slowed the dollar’s improvement. Our dollar has appreciated in the recent weeks as investors increase their risk tolerance, but looks to drop in the near term on some weak US economic data.
The retail sector has seemed to stabilise slightly over the last few months. Retail turnover has remained steady after the increases seen in April, with seasonally adjusted data showing total Australian turnover increasing by 1.0 per cent, and Victorian turnover increasing by 0.7 per cent for the month. Unfortunately trend data not available from the ABS at the moment, as a number of issues related to current economic conditions (including the introduction of that government stimulus package) have made the calculation of the trend data series difficult.
Sales of new cars are 17 per cent lower than they were this time last year but showing improvement for the first time since January 2008, as sales increased by 0.1 per cent for the month of May 2009 in trend terms. Sale of new motor vehicles was up 5.4 per cent for the month in seasonally adjusted terms, however, it will take many months of improving sales to reverse the trend witnessed throughout the last year.
Tags: Hodges Real Estate, Melbourne Real Estate, real estate recovery, real estate price growth, residential property prices, REIV, Residential property
