{"id":38712,"date":"2022-05-21T16:18:23","date_gmt":"2022-05-21T04:18:23","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=38712"},"modified":"2022-05-21T16:18:23","modified_gmt":"2022-05-21T04:18:23","slug":"property-prices-have-risen-seven-times-faster-than-wages-in-a-year-can-it-continue","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/property-prices-have-risen-seven-times-faster-than-wages-in-a-year-can-it-continue\/","title":{"rendered":"Property prices have risen seven times faster than wages in a year. Can it continue?"},"content":{"rendered":"

PHOTO: Australian house prices. FILE<\/strong><\/p>\n

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Housing values have risen at almost seven times the pace of wages growth over the past year, even though the property market is starting to weaken and pay packets are picking up.<\/p>\n

By later this year or next, first home buyers could find property prices falling and wages improving, which would be some help in saving a deposit but would be offset by higher interest rates on their mortgage.<\/p>\n

Wages rose by 2.4 per cent over the year to March, Australian Bureau of Statistics figures released on Wednesday showed \u2014 slightly less than economists expected.<\/p>\n

Meanwhile, the latest property data shows Australian dwelling values rose 16.7 per cent over the year to April \u2014 nearly seven times as fast, according to CoreLogic.<\/p>\n<\/div>\n

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A property price boom over the past two years sparked by ultra-low interest rates, has left many potential first time buyers struggling to save a deposit and earning stagnant wages.<\/p>\n

\"Boomers\"<\/a><\/div>\n
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Did boomers or millennials have it harder buying a house?<\/a><\/h2>\n<\/header>\n<\/div>\n

The tide has started to shift more recently. Over the past three months, national property values are up only 1.9 per cent. Home values have even fallen slightly in Sydney and Melbourne, while workers\u2019 pay packets rose 0.7 per cent in the three months to March, although pay rises are being eaten up by the rising cost of living.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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\u201cWages growth has picked up, but it\u2019s certainly not \u2014 as measured by the Wage Price Index \u2014 particularly strong, although it is directionally moving up and that\u2019s a good thing, and that\u2019s what you\u2019d expect given how tight the labour market is.\u201d<\/p>\n

Australia\u2019s unemployment rate was at a 48-year low of 3.9 per cent in April, ABS figures released on Thursday show.<\/p>\n

Aird expects it to take time for wages to rise further as many employees are covered by multi-year agreements. The participation rate is also at record highs, he added, compared to in the US where some workers got sick with COVID and dropped out of the workforce, so the smaller pool of workers helped employees push for higher pay.<\/p>\n

\"Anthony<\/a><\/div>\n
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Melissa Caddick\u2019s husband Anthony Koletti hands couple\u2019s mansion to receivers<\/a><\/h2>\n<\/header>\n<\/div>\n

He expects that later this year and next, property values more broadly will be falling and wages growth improving.<\/p>\n<\/div>\n

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\u201cIt sounds counterintuitive to think that as people\u2019s wages go up, the amount of money they\u2019re willing to pay for a home is less,\u201d he said.<\/p>\n

\u201cThe interest rate is going up \u2014 that\u2019s going to weigh on how much someone can borrow \u2014 and their mortgage repayments are going to be higher for a given level of debt.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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