Ensure you never miss an issue of the
real estate business bulletin
Unemployment rate has little impact on loan affordability: Study

Unemployment rate has little impact on loan affordability: Study

by James Mitchell 0 comments

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.”

 

Unemployment rate has little impact on loan affordability: Study
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?