Another three minutes of real estate (well sort of) fun.
1. Good news – oh yes
Without this Missive wanting to sound like a James Craig show (though I am a fan), the Commsec chief economist has just released my idea of a great formula – this, on the back of the surprise employment gains for May and the good economic news released earlier in the week:
Employment gains + rate cuts + strong economic growth data = confidence
Confidence is precisely what we have been lacking in recent times – you may have heard me say that just a few times before – so let’s hope, like Craig, that these latest figures provide sufficient help to give a good jolt to the economy.
The employment gain of 39,000 in May was impressive in the face of the flat result expected by economists and the 15,500 rise in April. We have seen an extra 87,000 jobs created all up over the last three months.
There’s a way to go, but in comparison to Europe and the United States, Australia’s job market is healthy and moving towards supporting growth in the broader economy.
Don’t forget that other formula, too:
More jobs = more spending = more government tax receipts
2. Over the ditch
The NZ housing market peaked in late 2007. The latest news from Kiwi-land is that residential property values have almost recovered the losses made over the last five years. Even the values in Christchurch are almost back to the market peak.
Across both islands, values rose 0.4% over the last three months and jumped 3.1% over the last year. Across NZ values are now just 2.9% below their 2007 peak.
Sales volumes are also strong at present, with residential property trading at its fastest clip since 2007, too.
Auckland property values are up 5% over the last year, with end values now also about 5% higher than the 2007 market peak. Hamilton rose just 2% last year, and end prices remain 11% behind the 2007 high water mark.
Values in Christchurch have been rising steadily for much of the past year, being now also 5% higher than this time in 2011. Today, property values in Christchurch are on par with what they were in 2007.
Dunedin (the house of pain, regardless of whether you play rugby there or not – bloody cold joint!), saw a 4.5% lift in year on year values. Property prices down there remain 5% below 2007 prices.
The average house in Auckland costs NZ$552,000 or A$430,000; in Hamilton it is NZ$337,000 or A$260,000; in Christchurch it is NZ$423,000 or A$330,000 and in Dunedin it is currently NZ$256,000 or A$200,000.
3. Older and wiser
Well, we’d like to think so, wouldn’t we?
But is it true that age brings wisdom? Can wisdom be quantified?
The Economist reports on a study that says, “yes”. A group of Japanese and Americans were rated on five crucial aspects of wise reasoning. Check your score against the wise reasoning barometer:
- Willingness to seek opportunities to resolve conflict
- Willingness to search for compromise
- Recognition of the limits of personal knowledge
- Awareness that more than one perspective on a problem can exist
- Appreciation of the facts that things may get worse before they get better
The findings – The West (Yanks, Aussies etc) become wiser with age; Japanese are wise more or less from the get-go; they learn wisdom faster.
The paradox – with age, Westies gain more of the group wisdom suitable for a collectivist society like Japan and – you guessed it – Japanese score better for operating in individualistic societies like Australia.
The moral – the Economist says do not assume that your prejudices are correct….very Zen.…I’ll have to think on it a bit more.
Last week’s Matusik Pulse found that one in five respondents didn’t think our houses are too big at all. When looking at what aspect of the home could be shrunk or forgone, about half thought the media room. Another 10% thought that we should shave about 10% off the size of most rooms/spaces in our homes. Another 10% would reduce the number of bedrooms and surprisingly, just 6% would remove the dining area.
Very few would reduce storage space, hallways and entry points or the size of the kitchen.
Maybe Masterchef and Jamie Oliver et al are having an impact on how we use our home spaces after all?
Revisit our Bunkum missive comments, too, for some interesting replies to house sizes. I got many more directly emailed to me along similar lines.
This week’s poll question is about buying investment property. “If you wanted to buy a $380,000 investment property in Brisbane that showed a $400 per week rental return, which one would best suit your portfolio?”
Again, this will just take ten seconds of your time. Results in next Saturday’s Weekend 3.
Enjoy your weekend, and remember…. pass this Missive on to 3 others.
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