August Market Update
BRISBANE PROPERTY MARKET
Brisbane recorded a slight decline of 0.1% in the month of August, but values seem to be stabilising.
Overall property values are up 3.5% for the year to date.
While consumer sentiment rose in May, June and July, it fell slightly through August, which was a result of Victoria’s second wave of corona virus and the reintroduction of restrictions
Nevertheless, research from realestate.com.au says that Queensland property purchasers were the most confident buyers nationally.
Auction clearance rates remain in line with historical monthly average.
Comparatively across other capitals, Brisbane’s rental market has remained stable, recording only a -0.7% value decline overall.
Brisbane’s overall vacancy rate is sitting at 2.2%.
Source: CoreLogic - Index results as at 31 August 2020
AUSTRALIAN ECONOMY
Australia is experiencing it’s first recession in nearly three decades
Australia’s economy recorded a 7% contraction between April and June, the largest single quarter decline on record.
The RBA maintained it’s cash rate at 0.25% and confirmed it will not increase this until progress is being made towards full employment.
The Australian Dollar is at its highest in 2 years, largely due to US dollar depreciation and higher commodity prices.
National household saving ratio has ballooned to 19.8% comparatively to 2.8% in June 2019
Recovery is now underway in most of Australia, and the downturn has not been as severe as once expected.
Employment increased in June and July, although unemployment and underemployment remain high. Expected to increase to 10 per cent later in 2020 then retract again to 7 per cent.
There has been subdued growth in aggregate demand - and it is likely to be some months before a meaningful recovery in the labour market is underway.
Inflation is expected to average between 1 and 1.5% over the next couple of years.
The economy is being supported by the substantial, coordinated and unprecedented policy easing over the past six months.
Public sector balance sheets in Australia are in good shape.
Support for the recovery is also provided by Australia's financial institutions, which also have strong balance sheets and access to high levels of liquidity.
RBA has extended the Term Funding Facility, with Authorised Deposit-taking Institutions able to draw on the extra funding up until end of June 2021, providing continued relief to borrowers.
GLOBAL ECONOMY
An uneven economic recovery is now underway.
Future path is highly dependent on the containment of the virus.
High or rising infection rates have seen a recent loss of growth momentum in some economies.
China's economic growth has been relatively strong.
Volatility is low in financial markets; price of many assets have risen substantially despite continued uncertainty.
Bond yields remain at historically low levels.
US Dollar has depreciated against most currencies over recent months.