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ISCOVER
It has always looked like Australia should pull through these tough times better than most and news that we have dodged recession – for now at least – will hearten brokers the nation over that there are better times ahead.
We’re not out of the woods yet, but there is little doubt we have fared better than most – and the latest round of data suggests a recovery may be closer than we think.
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In the March quarter GDP rose by an impressive 0.4 per cent and the Australian economy was acknowledged for outperforming all of its developed peers.
Retail spending has increased steadily over the last couple of months indicating growing consumer confidence – a critical component of any economic recovery.
Stronger than expected retail figures may be linked with better than expected employment figures.
The latest ABS data has revealed that the unemployment rate actually fell by 0.3 per cent to 5.4 per cent in April which is welcome news for businesses and borrowers alike.
Unemployment is still likely to rise due to the economic slowdown but it is now unlikely to hit the 9 per cent estimates that have been bandied about by some economists.
Add to this a strengthening Aussie dollar and renewed investor confidence in the stockmarket and it appears there is good reason for optimism.
And Australia’s resilience has not gone unnoticed in the international arena.
According to a recent Servcorp International Business Confidence Survey of 7,500 business people from more than 24 nations, Australia is surviving the economic crisis better than any other country.
For the broking industry, the fact our property markets have largely held firm is the most encouraging sign yet that the industry will continue to prosper.
While there have been declining values in some segments the overall picture remains stable.
In conjunction with flatter property prices and the sharp fall in interest rates, affordability last month hit a six year high.
While this alone is unlikely to see buyers rush back into the market it bodes well for sustained and steady growth once the economy recovers.
For now, healthy activity at the bottom end of the property market looks set to continue thanks to first home buyers, who now account for a record 27.3 per cent of all new home loans.
We’re a long way off the boom times but a steady recovery could be closer than we previously dared hope.
Alex Whitlock
Publisher, Mortgage Business
