A recent study by PRDnationwide’s research department shows little connection between the national unemployment rate and a decrease in home loan affordability.
The study – which took into account statistics from the past decade – comes after the recent announcement that Qantas will be axing 5,000 jobs, and news of the winding down of the Australian automotive industry, sparking rising unemployment fears.
The data actually revealed the opposite effect – at times when the national unemployment rate was peaking, home loan affordability was at its highest level.
PRDnationwide national research manager Dr Diaswati Mardiasmo said that those who had trumpeted recent job losses as having a disastrous impact on the Australian property sector needed to take the raw emotion out of the equation and look at the figures.
“There has been a lot of chatter around how realised and projected job losses in Australia will create waves in the property market, with those affected unable to afford to become homeowners or service their mortgage instalments on existing home purchases,” Dr Mardiasmo said.
“It is a difficult situation for those directly involved and there is a level of public outrage that I can understand, but if you take the emotion out of this situation, the actual numbers show there is only intermittent correlation between increasing unemployment and decreasing home affordability,” she said.
“In fact, if we point to March 2009 when the national unemployment rate topped 5.8 per cent, home loan affordability was actually at its peak.”