JOBS

The ABS recently released its January unemployment data. This data is relevant to investors because jobs being one of the biggest drivers of property prices.

ABS jobs data recorded Australia's unemployment at 5% which is very good when comparing to most of the Western World (e.g. unemployment in the States is still hovering around 10%).

However, a closer look at the numbers suggests that everything isn't quite as good as it may seem. This is because although the unemployment rate remained unchanged, the economy actually shed 8,000 full time jobs and grew 32,000 part time jobs.

Lenders don't view a part time job as favourably as a full time job which could mean less demand due to difficulties in financing. In other words, the employment slippage actually points to further evidence of a lull in the property market.

Momentum is a very powerful force, and investors need to bear in mind that the economic effect of the floods, cyclones and bush fires is still to flow through the economy and as such, one should assume property prices are set to stagnate for some time to come.

BUILDING APPROVALS

Building approvals for apartments lifted by more than a third in December 2010 from the same time the previous year, according to figures released this week by the Australian Bureau of Statistics.

The total number of residential building approvals rose by 8.7 per cent in December 2010 to be up by 1.8 per cent over the previous quarter. The figure remains 3.4 per cent lower than in the same quarter of 2009.

The improvement was driven by the increase in the number of private sector `other' dwellings, which rose by 21.3 per cent, to be 37.9 per cent higher than in December 2009. Private sector houses remained flat in December, to be down by 16 per cent over the course of 2010. New South Wales recorded the highest number of approvals with a 16.7 per cent rise (seasonally adjusted) although this follows a 12.0 per cent decline in November. 

Increases were recorded in Victoria (up by 11.4 per cent), South Australia (up by 1.1 per cent) and Tasmania (up by 9.9 per cent).  Falls were reported in Queensland (down by 5.7 per cent) and Western Australia (down by 4.2 per cent).  In trend terms approvals in the ACT were up by 7.5 per cent while Northern Territory approvals fell by 12.0 per cent.    

SOURCE: ABS, RESIDEX