Why a surge in house prices could slow Australia's lockdown recovery

© Provided by Daily Mail MailOnline logo

A surge in Australian house prices could jeopardise the recovery from lockdowns as borrowers cut back on spending.

During the past year, Sydney’s median house price soared by 26 per cent to a record $1.293 million.

Record-low interest rates pushed real estate values to record highs in both capital cities and country towns, as professionals able to work from home moved for more space.

National property prices climbed by 18.4 per cent in the year to August, the fastest annual pace since July 1989, CoreLogic data showed.  

Reserve Bank of Australia assistant governor Michele Bullock said consumers paying off more debt would be less likely to spend after a financial upheaval.

‘There is quite a bit of international and domestic evidence that suggests that households that have high levels of debt are more likely to curb consumption in response to shocks in income or wealth,’ she said on Wednesday.

© Provided by Daily Mail (

House prices keep surging

SYDNEY: Up 1.9 per cent to $1,293,450 and 26 per cent annually

MELBOURNE: Up 1.4 per cent to $954,496 and 15.6 per cent annually

BRISBANE: Up 2.1 per cent to $691,214 and 20.2 per cent annually

ADELAIDE: Up 2.1 per cent to $568,110 and 19.8 per cent annually

HOBART: Up 2.2 per cent to $684,737 and 23.9 per cent annually

DARWIN: Down 0.8 per cent to $572,102 and 21.2 per cent annually

CANBERRA: Up 2.4 per cent to $933,960 and 25.7 per cent annually

Source: CoreLogic Home Value Index monthly changes for August 2021., both monthly and annually. Perth figures were not available

‘A large number of highly indebted households reacting in such a way to an economic downturn or decline in housing prices could amplify the economic shock. 

‘A boom in the housing market, accompanied by an increase in housing debt could therefore make the economy more susceptible to downturns.’

The RBA promised to keep interest rates on hold at a record-low 0.1 per cent until 2024, as it prioritises economic recovery from lockdowns over trying to stop the housing market from overheating.

But Ms Bullock said lending policies needed to address surging debt levels.

‘They should be targeted at the risks arising from highly indebted borrowers,’ she said.

The Australian Prudential Regulation Authority, the banking regulator, in 2017 cracked down on interest-only loans as investors pushed up property prices, but in 2021 owner-occupiers make up a bigger proportion of borrowers. 

While the major banks are offering mortgage rates of two per cent, the prospect of rate rises in 2024 means many borrowers would be careful with their spending in 2021 as lockdowns created uncertainty. 

Stay-at-home orders in Australia’s biggest cities are affecting the labour market, new data from the federal government’s National Skills Commission revealed on Wednesday.

In NSW, where Sydney has been in lockdown since June 26, job vacancies in July and August plunged by 19.1 per cent, as 14,683 fewer jobs were advertised.

This was even worse than Melbourne’s second wave of July and August last year, which saw job ads fall by 14.5 per cent, as vacancy levels fell by 4,417. 

© Provided by Daily Mail (

In July and August, NSW lost 210,000 jobs as hours worked last month fell by 6.5 per cent, separate Australian Bureau of Statistics data showed.

CommSec senior economist Ryan Felsman said it was clear lockdowns were making employers more reluctant to hire.

‘The extended lockdown in NSW is having a massive impact on the labour market,’ he said. 

Ms Bullock said borrowers who lost working hours were more likely to cut back on spending, which in turn would hamper job creation and economic activity.

‘If households are constrained, in the sense that they don’t have a great deal of income left after meeting debt servicing requirements and the basics of their lifestyle, they are more likely to reduce consumption,’ she said.

‘This will amplify the initial impact of the economic shock.’

The Paris-based OECD is expecting lockdowns in Sydney, Melbourne and Canberra to weigh down Australia’s economic growth.

It is now forecasting a 4 per cent expansion pace in 2021, down 1.1 percentage points compared with its May prediction published before the lockdowns.  

© Provided by Daily Mail (

Internet Explorer Channel Network
News Related

OTHER NEWS

Rocky Mountain high: U.S. looks to Colorado for methane emissions policy

FILE PHOTO: Signage is seen at the headquarters of the United States Environmental Protection Agency (EPA) in Washington, D.C. By Valerie Volcovici and Nichola Groom WASHINGTON (Reuters) – U.S. environmental ... Read more »

Dubai: Low-interest rates boost mortgage transactions in 2021

© Provided by Khaleej Times Dubai: Low-interest rates boost mortgage transactions in 2021 The mortgage market in Dubai has grown at an exponential rate in the first three quarters of ... Read more »

Tilly Ramsay: Strictly viewers praise star for receiving high score after Steve Allen's derogatory remark

© Provided by The Independent Strictly Come Dancing viewers have praised Tilly Ramsay for dancing so well after a “tough week” following her latest performance. The 19-year-old social media star, ... Read more »

The Apple Watch Series 7's faces still don't do it for me, and the problem is the hands

© Provided by T3 Five different Apple Watch faces I’ve been testing and review Apple Watches since the very first one, and anyone who’s read my reviews – including my ... Read more »

Strictly result leaked - closest dance off yet as one celebrity is booted off BBC show

It well may be murder on the dance floor as week 5 Strictly result has been leaked – and Mirror Online can confirm a fan favourite is leaving the sequinned ... Read more »

Only 8% of schools in England have received air monitors promised by government

© Provided by The Guardian Photograph: Anthony Devlin/Getty Images More than nine in 10 schools are still waiting for airflow monitors, which can reduce the spread of Covid-19, despite the ... Read more »

Everton stance on Stoke City player emerges amid Tottenham and Aston Villa interest as Brighton enter transfer race

© Provided by Football League World Championship – Stoke City v West Bromwich Albion Everton are preparing to step up their interest in Stoke City’s influential defender Harry Souttar ahead ... Read more »

With an Eye on China, India Must Fix Its Tank Problem

© Provided by News18 With an Eye on China, India Must Fix Its Tank Problem With the Ministry of Defence (MoD), under the Modi government, ordering the Indian Army (IA) ... Read more »

Ahead of India vs Pakistan T20 World Cup clash, fans perform 'HAVAN' in Bengaluru

© Provided by Zee News Bengaluru: Ahead of the high-octane India-Pakistan T20 Cricket World Cup in Dubai on Sunday, Team India fans performed a `havan` in Bengaluru to seek the divine ... Read more »

Madhya Pradesh Minister's son seen folding hands when his car stopped during checking, video goes viral - Watch

© Provided by Zee News New Delhi: The son of Madhya Pradesh Revenue and Transport Minister Govind Singh Rajput, Akash Rajput was reportedly stopped during magisterial checking in Sagar on Saturday ... Read more »

Bittersweet photo of father and son who lost their limbs due to Syria's civil war wins top prize

© Siena International Photography Awards/Mehmet Aslan Bittersweet photo of father and son who lost their limbs due to Syria’s civil war wins top prize Photographer Mehmet Aslan has won the ... Read more »

Road Trip Diaries: Ajith relaxing & having water on a deserted place in the lastest PHOTO goes viral

© Provided by Pinkvilla Thala Ajith’s fans yet again go into a frenzy after his photos from bike trip go viral on social media. The Viswasam actor went on a ... Read more »

Kid crashes father's live interview on TV, check news host's reaction in viral video- Watch

© Provided by Zee News New Delhi: Children are the most notorious creature one can come across. They are highly unpredictable and can be seen jumping around everywhere.  A video ... Read more »

Mumbai Drugs Case: Witness Claims NCB 'Asked Him to Sign Blank Papers'; Agency Denies Charge

© Provided by News18 Mumbai Drugs Case: Witness Claims NCB ‘Asked Him to Sign Blank Papers’; Agency Denies Charge A witness of the Narcotics Control Bureau in connection with a ... Read more »

This is how BTS's J-Hope reacted to Jungkook rapping a classic hip hop song – watch video

© Provided by BollywoodLife.com In episode 154 of BTS’s variety show Run BTS!, the Bangatan boys went to a house to remember the past six years of episodes. The BTS ... Read more »

'He is the Inzamam-Ul-Haq of India': Shoaib Akhtar names Indian player who is more popular than Virat Kohli

© Provided by DNA While India and Pakistan don’t meet for bilateral series and only lock horns during ICC tournaments, fans from across borders have adoration for the players. Now ... Read more »

BB 15: Salman Slams Karan For Attacking Pratik In Weekend Ka Vaar

© Provided by Lehren Salman Slams Karan The third weekend special episode of fans and audiences favorite indian TV reality show Bigg Boss 15 hosted by Salman Khan was a ... Read more »

Not Virat Kohli; Yuzvendra Chahal's Wife Dhanashree Verma Picks MS Dhoni as Her Favourite Cricketer Ahead of India-Pakistan T20 WC Clash

© Ankit Banerjee | India.com Sports Desk Dhanashree Verma MS Dhoni Favourite Cricketer (Image: Twitter) Mumbai: Dhanashree Verma is extremely popular on social media, thanks to her dance videos – ... Read more »

Down with dengue, Minister's son's sugar level critical, shifted to hospital

© Provided by Hindustan Times Ashish Mishra was taken to the district hospital in Lakhimpur Kheri in an ambulance after a team of medical experts said he needed to be ... Read more »

Jammu will no longer suffer discrimination: Amit Shah in J K

Jammu will no longer suffer discrimination: Amit Shah in J&K In his first visit to Jammu and Kashmir since the abrogation of Article 370 in August 2019, Amit Shah said ... Read more »

Karthik picks between Rishabh Pant, Ishan Kishan to feature in India's T20 WC XI vs Pakistan: 'It's different ball game'

The stage is set for the highly-anticipated contest between India and Pakistan at the T20 World Cup and questions are already going around on which players should make the cut ... Read more »

Ghaziabad Couple Honey Traps Over 300 Men With Sex Chats & Videos, Extorts Rs 20 cr in 1 Year

© Provided by News18 Ghaziabad Couple Honey Traps Over 300 Men With Sex Chats & Videos, Extorts Rs 20 cr in 1 Year A couple from Ghaziabad honey-trapped and exhorted ... Read more »

STI rates ‘at their highest numbers' in US as Covid dominates health funding

Health officials in the US are concerned about how to divert key resources to combatting a rise in sexually-transmitted infections (STI) that is now continuing despite the social restrictions of ... Read more »

Uzbekistan votes as incumbent strongman guaranteed victory

© Provided by dw.com Only five political parties are allowed to contest the election. All are loyal to the president. Voters in Uzbekistan headed to the polls on Sunday, although ... Read more »

'Beautiful' 900-year-old Crusader sword discovered by diver off the coast of Israel

© Ariel Schalit/AP/ Jacob Sharvit, director of the Marine Archaeology Unit of the Israel Antiquities Authority holds a sword that experts say dates back to the Crusaders. Ariel Schalit/AP/ An ... Read more »

‘Kill them all, don't spare anyone': A massacre in Burkina Faso

© Provided by Al Jazeera In a photo from February 2020, Burkina Faso soldiers patrol aboard a pick-up truck at a camp sheltering Malian refugees, in Dori [Olympia de Maismont/AFP] ... Read more »

'More contagious' mutant of Delta variant that's scaring UK may be present in India too

A new mutation of the Delta variant of COVID-19 which was being monitored and assessed in the UK is present in India “in very low numbers”. Scientists of the INSACOG ... Read more »

Social Justice Ministry for decriminalising possession of small amount of drugs for personal use

The Social Justice and Empowerment Ministry has recommended decriminalising possession of small quantities of drugs for personal consumption in its review of the Narcotic Drugs and Psychotropic Substances (NDPS) Act ... Read more »

Goods train derails in Chhattisgarh, affects passenger rail traffic movement

Eight wagons of a goods train derailed near Surajpur in Chhattisgarh on Sunday, affecting the movement of passenger rail traffic on the route, a railway official said. No casualty was ... Read more »

Powerball Results, Numbers for 10/23/21: Did Anyone Win the $86M Jackpot?

The Powerball numbers on Saturday were 10, 30, 51, 57 and 63. The Powerball was 20 and the Power Play was 2X. © Justin Sullivan/Getty Images A customer buys Powerball ... Read more »

One dead, five injured in Uganda blast amid heightened terror threat

One person has died and five others were injured after an explosion in Uganda’s capital Kampala, the country’s President Yoweri Museveni said in a tweet Sunday. © BADRU KATUMBA/AFP/Getty Images ... Read more »

How George Washington's Idea of Executive Privilege Got Mangled

In plain language, President Joe Biden rejected former President Donald Trump’s assertion of executive privilege over executive branch information pertaining to the Jan. 6 insurrection. In a letter to the ... Read more »

Watch Manchester United vs. Liverpool: TV channel, live stream info, Sunday Premier League match start time

Sunday brings the biggest game of the Premier League weekend. © Provided by CBS Sports Who’s Playing Liverpool @ Manchester United Current Records: Liverpool 5-0-3; Manchester United 4-2-2 What to ... Read more »

Ex-soldiers offered mercenaries $10,000 a week to join a private army that would fight in Yemen's civil war, prosecutors says

© Provided by Business Insider A fighter with forces loyal to Yemen’s Saudi-backed government holds a position against Huthi rebels in Yemen’s northeastern province of Marib, on April 6, 2021. ... Read more »

What happened to Jack Grealish at Brighton was a theme of his Aston Villa career

Brummie playmaker Jack Grealish played a key role in Manchester City’s 4-1 demolition of Brighton on Saturday night. The England international, who left Aston Villa to join City for a ... Read more »

Coatbridge boxer Ben McGivern due a change in his luck

Coatbridge boxer Ben McGivern says if it wasn’t for bad luck he would have none at all, after being left without an opponent again earlier this month. But McGivern, pictured, ... Read more »

Arthritis: How to 'significantly reduce the risk' of developing the condition

Arthritis is not a single disease, but instead a way of referring to joint pain or joint disease. There are more than 100 types of arthritis and related conditions. Osteoarthritis ... Read more »

David Hare furious at BBC after it rejects his Covid play, starring Ralph Fiennes

A TV drama written and directed by Sir David Hare, produced by Sir Nicholas Hytner and starring Ralph Fiennes would be expected to excite any broadcaster. But the award-winning playwright ... Read more »

What Celtic fans are all saying about Carl Starfelt as Swede puts early season woes behind him

Carl Starfelt arrived at Celtic Park for £4.5m in the summer as the Ange Postecoglou rebuild started to take shape. The Swede’s signature was secured from European side Rubin Kazan, ... Read more »

Graeme Souness makes 'selfish' Mohamed Salah claim and issues Liverpool contract warning

Liverpool legend and pundit Graeme Souness believes Mohamed Salah is ‘as greedy a player he has seen’, but that’s what partly makes him as good as he is. The Egyptian ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic