How much do you really know about a house?
You probably know a lot more than you think.
A new study by Australian researchers has found that you could be getting a lot of value for your money if you consider the real estate market to be a good proxy for the state of the Australian economy.
The study, published in the Journal of Economics and Statistics, looked at the Australian housing market over the past six years, and found that a combination of strong house price growth and weak house price inflation were the primary drivers of house price gains.
But the study also looked at other indicators to see if those trends were changing.
So, what did the study find?
“The housing market has been a big contributor to Australian economic growth,” lead author Dr Andrew Trenberth said.
“It has been strong and strong and has been very resilient, so there is a lot to be excited about in terms of the housing market.”
But there are other drivers, which include weaker wage growth and higher unemployment rates.
“These two things can both push the labour market towards more volatile prices and higher prices.”
The key finding of the study is that if you compare the house price trend to the broader Australian economy, the stronger house price trends are what has driven up the economy.
In particular, the study found that the stronger housing price trends in the first half of this year were largely due to strong house prices.
That is consistent with the findings of other recent research, which has found house price increases are largely driven by strong labour demand.
The strongest housing price growth in the Australian market over recent years was in the last three years, when prices were up more than 70 per cent.
“The strong labour market has meant that house prices have been rising faster than wage growth, so that has been the key driver of house prices in the past year,” Dr Trenbrith said.
The researchers also found that stronger house prices had driven up wage growth.
“We have seen a lot about wage growth in Australia, particularly in the wake of the recession, but we have also seen a huge amount of wage growth over the last two years, in part because of the strong labour markets,” Dr Trinder said.
In a survey conducted by the National Institute of Economic and Social Research in June, researchers found that wages were growing at a rate of 4.1 per cent per year.
The biggest driver of wage gains was increased private investment in the construction and renovation of houses.
That led to a total of $2.9 trillion of wage increases in Australia.
“There is an opportunity to be optimistic that the housing markets will continue to rise, as the unemployment rate is falling, as wage growth is strong and wage growth continues to rise,” Dr Rohan said.
But in a report published by the Australian National University’s Centre for Macroeconomic Policy in December, Dr Trinders and his team found the stronger labour market had a negative impact on the economy, but the stronger household demand was a major driver of that negative impact.
That means there is an important trade-off between higher wage growth during strong economic times, and the strong housing market, which means the housing sector has been in a stronger position to boost wage growth than the economy overall.
“A strong labour force is a good thing, but when the economy is weak and there is strong labour, the economy needs to be strong and the labour force has to be stronger than the wage growth,” Dr Shweta Srivastava, who led the study, said.
How the research compares to previous research The paper does not look at all the economic factors that could influence house prices, but it does look at the key indicators to look at how the Australian house price market has changed in the year to date.
Dr Trinders and his co-authors looked at how house prices grew in each state and territory.
They found that house price rises have been strong in some areas, but weaker in others.
For example, the housing price in the western Sydney suburb of Kensington has been up about 13 per cent since the start of the year.
In Queensland, house prices rose about 8 per cent in the same period.
In the south-east of the country, house price falls have been even more pronounced.
The strong labour gains are a big deal, but they are not as big as the housing growth, which is the main driver of the stronger wage growth seen over the years.
“In the past 12 months, there has been relatively little wage growth relative to the labour demand for house labour,” Dr Srivas said.
“The strong wage growth has been driven by rising house prices and labour demand, but in the long run, the rise in house prices is driven by higher wage demand.
If you are in a strong position in the labour supply of house labour, then house price declines are less of a problem.
In terms of house values,