The rebound in the Australian economy forecast in the Mid-Year Economic and Fiscal Outlook (MYFEO) is positive for the real estate market, said the new chairman of the Real Estate Institute of Australia.
Hayden Groves, who was elected last week, said the economic boost should give buyers and sellers the confidence to move forward on their real estate journey.
The MYFEO revealed that real GDP is expected to grow 4.5% in 2021 and 2022, while the unemployment rate is expected to fall to 4.25% in the June 2023 quarter.
Wages are also expected to rise 11.25% this fiscal year and 2024-25, and exceed inflation, which is expected to rise 10.25%.
âThe expected increase in economic growth from 1.5% in 2020-2021 to 3.75% in 2021-2022 is a major boost for the economy,â Mr. Groves said.
“With a drop in the unemployment rate to 4.5% and 4.25% the following year, wage growth of 2.25% and 2.75% during these two years, then an acceleration with a CPI in the RBA’s goal will be a positive for the real estate industry.
Federal Treasurer Josh Frydenberg said the rapid recovery from the lockdowns imposed by Delta is expected to see the addition of about one million jobs between October 2021 and the end of the forecast period, or about 150,000 more jobs than initially planned in the 2021-22 budget. .
“The underlying cash balance in 2021-2022 is expected to be a deficit of $ 99.2 billion (4.5% of GDP), an improvement of $ 7.4 billion from the 2021-2022 budget,” said he declared.
“And $ 2.3 billion more on attackers.”
The Property Council of Australia also welcomed the treasurer’s economic outlook and forecast.
âThe MYEFO shows the Australian economy is on track for a strong recovery, supported by a strong real estate sector, which employs more people than any other sector,â the council said in a statement.
“The real estate industry is set and ready to lead this rebound in jobs and economic activity.”
The council said it was particularly satisfied with the migration recovery plan.
“The Real Estate Board also welcomes the federal government’s plan to bring back normal levels of overseas net migration one year earlier than expected and then to ‘catch-up levels’ for two years from there,” said the board.
“It will be a critical ingredient in supporting economic recovery and filling critical skills gaps.”
Some schools of thought question whether increased migration will hamper wage growth, but Frydenberg argues that both can increase simultaneously.
“I don’t see it as a binary choice between having a reasonable and measured immigration program … as well as a tighter labor market and putting in place policies that raise real wages,” he said. ABC News.
Mr Groves said 2022 is shaping up to be another good year for the Australian property market.
“The outlook for interest rates is favorable in this scenario, and with signs of stabilizing prices, buyers and sellers should have confidence in the economy and the real estate sector,” he said.
âWith evidence that new listings are on the rise, the number of properties coming to market early next year is expected to approach long-term average levels, which in turn should moderate price increases. , thus facilitating the decline in affordability recorded in 2021.
âWith the possibility of tax cuts next year increasing disposable income, accessibility would be enhanced.
“While all signs are positive for the real estate industry, a long term plan for the supply is still needed.”