Cycle turns
The ABS released its official residential price indexes for the second quarter of calendar year 2019.
These are dated figures, and CoreLogic's indexes have shown price gains of about 3 per cent for Sydney and Melbourne since the election, but it's still worth looking back at what went before.
From peak to trough Sydney's detached house price index fell 13.7 per cent, and attached dwellings were also down 11.7 per cent over the two years to June 2019.
In terms of implications for monetary policy, the talk naturally turns to Sydney as the most expensive market in the country, in dollar terms.
Two points on this, though.
Firstly, globally there are many cities with (often dramatically) higher price-to-income ratios than Sydney: from London to New York, Mumbai to Paris, from Tianjin to Tokyo, to Shanghai, Shenzhen, Seoul, and Singapore.
And secondly, since the inception of the ABS data series in 2003, Sydney has been the worst performing capital city market with nominal price gains over 16 years of +80 per cent (as compared to +140 per cent in Hobart).
To be fair, 2003 was a cyclical peak for Sydney, but still 16 years is a pretty long period of relative underperformance.
To be fair, 2003 was a cyclical peak for Sydney, but still 16 years is a pretty long period of relative underperformance.
Australia's mean dwelling price fell from a peak of $689,700 in 2017 to $638,900 at the bottom of the cycle in June 2019.
The preliminary estimate for the number of dwellings was 10,347,200, with the rate of increase in the dwelling stock accelerating up until 2016, but soon being set to fade again.
With the Aussie population clock set to blaze past 25½ million over the coming few days even the record construction boom has failed to significantly outrun population growth.
Overall, this left the value of the dwelling stock at $6,610,590,100,000, well down from close to $7 trillion at the 2017 peak.
All interesting stuff, no question, but the market immediately bounced upon the election result, and now Sydney and Melbourne prices are in a strong uptrend as dwelling starts are tightening dramatically.
The Reserve Bank noted in its Minutes today that weakness in dwelling construction will sow the seeds of the next upturn.
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All eyes will now turn to the August 2019 labour force figures, due for release on Thursday.
Westpac expects employment growth of just +7,000 for the month - slowing the annual pace of employment growth - and for the participation rate to hold flat.
Such an outcome would see the unemployment rate levitate further away from full employment at 5.3 per cent.
If they're right, then in all probability so too will be their forecast for an interest rate cut in October.
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All eyes will now turn to the August 2019 labour force figures, due for release on Thursday.
Westpac expects employment growth of just +7,000 for the month - slowing the annual pace of employment growth - and for the participation rate to hold flat.
Such an outcome would see the unemployment rate levitate further away from full employment at 5.3 per cent.
If they're right, then in all probability so too will be their forecast for an interest rate cut in October.
