First-time home buyers are searching mortgage websites for ‘‘no deposit’’ home loans in vain. They don’t exist.
Research by mortgage broker Loan Market shows that internet searches containing ‘‘no deposit loans’’ have increased 28 per cent since the start of the year.
An examination of web traffic by Experian Hitwise, a global online competitive intelligence service, shows that such inquiries were up 57 per cent this month.
Yet again the strength of the labour market overwhelmed the consensus expectation of a 15,000 rise in employment. Employment has now risen in ten of the last 12 months, adding 353,200 to the workforce over the period. Even though there has been a significant recovery in labour market conditions across all the states, the most dramatic turnaround over the past year has occurred in the resource states. Consequently, the labour market is tight, especially in WA where the unemployment rate is at 4%; down from 5% at the start of the year.
Even in the big scheme of things, an unemployment rate of 5.1% at the national level is very close to the accepted benchmark of full employment (of 5%), below which inflationary pressures start to build.
Both full and part-time employment rose during the month. The increase in full-time employment 18,000 suggesting companies remain confident of the sustainability of the economic recovery.
Clearly, the further tightening of the labour market will increase the upwards pressure on interest rates. This will dampen the demand for dwellings. However, pulling in the opposite direction, low unemployment and a strengthening labour will raise the demand for housing, especially if perceptions of permanent income increase as a consequence.
The recovery in the labour market is likely to continue, as job ads, business survey and the ending of the standoff between the mining companies and the Government all point to further strong employment growth.
So, even though the current resources boom is not in full swing, the demand for labour remains strong, and likely to remain so. This suggests efforts to reduce the current heady rate of population growth will have a limited success. Indeed, any success in limiting the rate of population growth (which looks set to increase and not decrease) will only result in even tighter labour market conditions and higher interest rates as a consequence.
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