Is Local Unemployment Related to Local Housing Prices?

From The St. Louis FED.

The U.S. national labor market has recovered from the effects of the 2007-2009 recession; however despite the national labor market recovery, significant regional variation remains. Recent economic research highlights links between regional labor and housing markets. In their article, “ The Recent Evolution of Local U.S. Labor Markets, ” Authors Maximiliano Dvorkin and Hannah Shell examined the recession and recovery by reviewing the correlation between county-level unemployment rates and changes in housing prices.

National unemployment reached a pre-recession low in December 2007; by October 2009 the unemployment rate in most counties increased between 4 and 20 percentage points. The authors found that areas with higher unemployment rates before the recession experienced larger increases in unemployment during the recession, and those areas with lower unemployment rates before the recession experienced smaller upticks in unemployment during the recession.

The authors theorized that one reason for the disparity in unemployment rate increases could be related to the housing supply. Specifically, the unemployment rates in Arizona, New Mexico, Nevada and Utah remained above their pre-recession levels; these are also areas where housing prices dropped significantly.

When they examined the percent change in county house prices with the change in the county unemployment rate, the results showed a strong negative correlation, meaning that counties with larger decreases in housing prices experienced larger increases in the unemployment rate, perhaps because larger house price declines during downturns are leading to larger declines in local consumption spending that further depress the local economy.

Household Finance Confidence Slips After Christmas Binge

We have released the latest edition of the Digital Finance Analytics Household Finance Confidence Index, to end January 2017 today, which is a barometer of households attitudes towards their finances, derived from our rolling household surveys.

The aggregate index fell slightly from 103.2 in December to 102.68 during January, but is still sitting above a neutral measure of 100, and the trend remains positive. However there are a number of significant variations within the index as we look across states and household segments. These variations are important

First, the state scores are wider now than they have ever been, with households in NSW the most positive, at 110, whilst households in WA slip further to 81. Households in VIC and SA also slipped a little, whilst households in QLD were a little more positive.

The performance of the property market is the key determinate of the outcomes of household finance confidence, with those holding investment property slightly more positive than owner occupied property owners, whilst those who are renting, or living with family or friends are significantly less positive. Whilst some mortgage holders have received or expect to see a lift in their mortgage rate, this is offset by strong capital growth in recent months. The NSW property holders, especially in greater Sydney are by far the most positive. Renters in regional WA, where employment prospects are weaker, are the least positive.

Looking in detail at the drivers of the index, we see a rise by 1% of households who are felling less secure about their employment prospects – especially those in part-time jobs – and more are saying they are under employed.

In terms of the debt burden, there was a 4% rise in those less comfortable about the debt they hold, thanks to rising mortgages, the Christmas spending binge and higher mortgage rates.

More household are saying their real incomes have fallen, up 3%, whilst those who say their costs of living have risen was up 8%.

To offset these negative indicators however, some households reported better returns from term deposits and shares, as well as a significant boost to capital values on their property. Those who said their net worth had risen stood at 64%, up 5% from last month.  The property sector is firmly linked to household confidence, and vice-versa.

By way of background, these results are derived from our household surveys, averaged across Australia. We have 26,000 households in our sample at any one time. We include detailed questions covering various aspects of a household’s financial footprint. The index measures how households are feeling about their financial health. To calculate the index we ask questions which cover a number of different dimensions. We start by asking households how confident they are feeling about their job security, whether their real income has risen or fallen in the past year, their view on their costs of living over the same period, whether they have increased their loans and other outstanding debts including credit cards and whether they are saving more than last year. Finally we ask about their overall change in net worth over the past 12 months – by net worth we mean net assets less outstanding debts.

If scandals don’t make us switch banks, financial technology might

From The Conversation.

An efficient market relies on rational customers being willing to change suppliers when there’s good reason to do so. But what happens when customers stay put regardless? This issue is particularly acute in the banking industry.

Even when bank customers have a very good reason to switch, behavioural economics research shows they’re often reluctant to make the move. For example, big scandals that affect banks have a weak impact on consumer behaviour. However, there is a greater propensity to act among customers who are directly impacted.

Behavioural economics also shows bank customers are often slow to switch to take advantage of better offers from competitors. In 2016, the UK’s Competition and Markets Authority lamented that only “3% of personal and 4% of business customers switch to a different bank in any year” in the country. In 2013, Canstar suggested the figure is slightly higher in Australia at 5%.

Despite the slightly higher propensity to switch banks among Australian consumers, there’s much we can learn from the UK’s use of behavioural economics to nudge customers to act in their own best interests. In particular, financial technology companies can provide information platforms to make it easier for customers to switch.

Why bank customers don’t change

Behavioural economists have shown that consumer decisions are not rational. In particular, there is a “sunk cost bias” that affects consumer decisions. That is, consumers tend to place more value on any previous effort or expenditure they’ve made rather than judging economic value when they make decisions.

If you have left a 20% deposit on an item in a store, you will probably buy it, even if you found the same item for sale at 75% of the price elsewhere. So, customers will tend to stick with the bank they’ve got, despite scandals.

Competition authorities, led by the UK’s Competition and Markets Authority, are increasingly trying the “nudge” options offered by behavioural economics as a way to help persuade an irrational consumer to do what is in their best interests. A nudge is simply a mechanism to encourage people. It might be a reminder as to the consequences of not taking the action or benefits of going ahead.

Regulators have examined ways in which nudges can be given without unintended consequences. For example, should the nudge be a carrot or a stick? And which works best? The UK’s Competition and Markets Authority’s chief economic advisor, Mike Walker, advises regulators to “test, learn and adapt”.

A critical part of any nudge is presenting information in a way that can be used easily by consumers. Intermediaries, comparison tools and other financial technology services can provide this information.

How financial technology businesses could help

One of the barriers at the moment to getting customers to switch in Australia is a lack of information on all bank products and financial technology businesses to manage this information.

Although the UK implemented services that make it easier to switch between retail bank accounts, the UK’s Competition and Markets Authority found that this didn’t improve competition in the sector. To resolve this problem, it has ensured that customers have information on other banks and their account options as part of new account-switching regulation.

The way that this works is that customers can compare their existing offering with alternatives using an app that talks to an open electronic interface to the bank. The UK’s Competition and Markets Authority has mandated that the retail banks provide this interface, known as an applications programming interface, to both consumers and to financial technology businesses.

The effect is a space for new businesses to provide comparison tools. These new financial technology businesses will not impose a significant cost on the banks. Each of the UK banks has spent around £1 million each to create these open electronic interfaces, according to the UK Open Data Institute.

The open electronic interfaces will be associated with the European Union Second Payment Services Directive, which will be implemented before Brexit takes effect. This directive will help automate parts of the switching process.

The Australian banks and the Reserve Bank under the auspices of the Australian Payments Clearing Association are trialling a New Payments Platform to try to make it easier for customers to switch. But it’s not likely to have the same degree of flexibility and consistency as the approaches adopted in the UK, as it focuses on financial institution needs, rather than consumer ones.

Regulators in Australia should use behavioural economic analysis to learn more about how consumers use any new information on bank switching or services on this offered by financial technology businesses.

We’re still waiting on evidence on how these new financial technology companies will change consumer behaviour in the UK. But it is likely that in the very least it will increase the intensity of rivalry between the retail banks, this can only be a good outcome for consumers in the UK.

This could also inform a similar implementation in Australia, particularly after a parliamentary committee’s first report on the four major banks is released.

Author: Rob Nicholls, Lecturer in Business Law, UNSW

One in two Australian households expected to be retire ready

Fifty-three per cent of Australian households are expected to have enough for a comfortable retirement from their combined superannuation savings, personal assets and the Age Pension, according to the latest CommBank Retire Ready Index released today.

When the Age Pension is removed, the number of households that can afford a comfortable retirement reduces to 17 per cent, and to just six per cent when the calculations are based on superannuation only.

Linda Elkins, Executive General Manager Advice, Commonwealth Bank said: “The good news is that many Australians who may not currently be on track for a comfortable retirement are very close. A little bit of planning could see them reach the comfortable level.”

CommBank commissioned Rice Warner to prepare the report, which shows that many Australians are close to achieving the comfortable retirement standard defined by the Association of Superannuation Funds of Australia (ASFA). The report shows that while 53 per cent of Australian households are on track, a further 18 per cent are projected have 80 to 99 per cent of what they will need.

The overall results are mixed across cohorts and age groups, and highlight the growing importance of superannuation in helping Australians achieve a comfortable retirement.

Millennials will need to save harder for retirement than other cohorts due to their longer life expectancies. Superannuation will play an important role and will comprise, on average, 78 per cent of retirement assets for 25 year-olds working today.

“The CommBank Retire Ready Index shows how important superannuation will be for the long term financial well-being of young Australians. Many people do not become engaged with superannuation until later in their working lives, but taking a keener interest in superannuation now, consolidating accounts into one super fund and contributing a little more each week can help younger Australians stay on track for a comfortable retirement,” Ms Elkins said.

In the 60-64 year-old age group, couples are expected to be better off than singles but will have reduced retire readiness as they have not received the long term benefits of compulsory Superannuation Guarantee contributions. On the other hand, younger age groups are expected to have less in assets at retirement outside of superannuation when compared with their older counterparts.

“The report also shows that more men than women are retire ready. Women have longer life expectancies, and therefore need more assets to maintain a comfortable level of retirement. Women also generally have lower retirement savings due to career breaks during their child bearing years and lower average income levels throughout their working lives.”

Ms Elkins also said: “People who are approaching retirement could give their savings a boost by taking advantage of the current superannuation contribution caps before they are reduced on 1 July.”

“It is important that people of all ages understand how much they will need to save now to secure their financial futures.”

“To help Australians see how on track they are for a comfortable retirement, CommBank has developed a retirement calculator. This is a good first step to see how retire ready you are and is a useful resource to help you get on track to reach your goals for a comfortable retirement,” she said.

Super assets reaches $2.1 trillion

From InvestorDaily.

Australia’s retirement savings system grew to $2.1 trillion by the middle of 2016, according to new statistics published by APRA

In its Annual Superannuation Bulletin, released yesterday, APRA revealed total assets hit $2.1 trillion as at 30 June 2016.

Of that total, $621.7 billion (29.6 per cent) was held in SMSFs and $1.29 trillion was held by APRA regulated superannuation entities.

The remaining $185.5 billion comprised exempt public sector superannuation schemes ($132.2 billion) and the balance of life statutory funds ($53.3 billion).

Retail funds held 26 per cent of the total $2.1 trillion; industry funds held 22.2 per cent; public sector funds held 17 per cent and corporate funds held 2.6 per cent.

As at 30 June 2016, there were 144 APRA-regulated RSE licensees responsible for managing funds with more than four members.

Of the funds with more than four members, the annual rate of return for the year ended June 2016 was 2.9 per cent. The five-year average annualised rate of return to June 2016 was 7.4 per cent and the 10-year rate of return was 4.6 per cent.

Australian superannuation members paid $11.72 billion in fees for the 12 months to 30 June 2016, according to APRA.

Is big business, super funds the key to fixing social housing problem in Australia?

From The Herald Sun.

PHILANTHROPISTS, charities, superannuation funds and publicly-minded big business will be encouraged to build and manage social housing developments in a bid to dramatically boost the number of social houses available across Australia.

Treasurer Scott Morrison said major changes were needed in the way social housing was provided, to make it more attractive to the private sector.

The Lend Lease housing development in London is designed to provide affordable housing but also ensure profits for developers. Picture: Ella Pellegrini

Speaking at a $3.8 billion new housing estate in London which has set 25 per cent of its new houses aside for affordable housing, Mr Morrison said governments provided almost all of the social housing in Australia, but demand was outstripping supply.

“There are currently over 180,000 people on social housing waiting lists across Australia,’’ he said.

“The number of social housing dwellings would need to grow by almost 50 per cent in order to accommodate this number of people.

“At present the Commonwealth and state and territory governments combined are spending over $10 billion a year on housing but it is failing to improve outcomes, particularly for those with low-moderate incomes.’’

Mr Morrison will today launch a discussion paper on ways to increase the practise known as social impact investment, to get private sector involvement in the social housing market.

The aim is to make building, supplying and managing social housing an attractive business proposition, as well as being a good thing to do for the community.

At its core it is designed to deliver better outcomes for the people who use the service but it also needs to provide a financial return.

“If social impact investing doesn’t make money then people won’t do it,’’ Mr Morrison told News Corp.

“It’s not social impact benevolence. It’s social impact investment.’’

The Government could play a role by reducing the cost and burden of compliance, being a co-owner of a development, getting rid of legal barriers, helping organisations access low-cost, long-term finance, and potentially direct-paying Commonwealth rental assistance to landlords.

“A key objective is to create an enabling environment for social impact investment that doesn’t displace private sector financing,’’ Mr Morrison said.

Social impact investing can be done through issuing social impact bonds, which the New South Wales and South Australian governments are already doing on a project-by-project basis.

But large-scale private projects do not yet exist in Australia.

Mr Morrison this week toured the Elephant Gate project being developed by Lend Lease in Southwark, south London.

The project saw the notorious, crime-riddled Heygate council estate bulldozed, and a new development of 3000 homes go up in its place, incorporating community facilities such a skills centre, where trainees worked on the site.

A quarter of the properties were set aside for affordable housing — half of them available under shared ownership, where the owners buy just a portion of their home, according to their incomes.

The other homes are social housing, scattered throughout the entire complex, where tenants pay a capped rent, under the deal between Lend Lease and the Southwark Council.

“We don’t really have projects like this in Australia and it is does require a capacity in state governments, a capacity even in the Federal Government as well as building up our social organisations,’’ he said.

“You’ve got to get the returns, that’s the other challenging thing.

“You’ve got to get the security of income and that really does require you to rethink using your Commonwealth rental assistance and how you’re using welfare payments and getting a guarantee that rent is going to turn up in the bank account.

“When you start getting a more guaranteed income stream for these types of developments that’s far more attractive to the developers, far more attractive to the institutional investors.’’

High Household Debt Kills Real Growth

A new working paper from the BIS “The real effects of household debt in the short and long run” shows that high household debt (as measured by debt to GDP) has a significant negative long term effect on consumption, and so growth.

A 1 percentage point increase in the household debt-to-GDP ratio tends to lower growth in the long run by 0.1 percentage point. Our results suggest that the negative long-run effects on consumption tend to intensify as the household debt-to-GDP ratio exceeds 60%. For GDP growth, that intensification seems to occur when the ratio exceeds 80%.

Moreover, the negative correlation between household debt and consumption actually strengthens over time, following a surge in household borrowing. What is striking is that the negative correlation coefficient nearly doubles between the first and the fifth year following the increase in household debt.

Bad news for Australian households where the ratio is well above 80%, at 130%.

This is explained by massive amounts of borrowing for housing (both owner occupied and investment) whilst unsecured personal debt is not growing. Such high household debt, even with low interest rates sucks spending from the economy, and is a brake on growth. The swelling value of home prices, and paper wealth (as well as growing bank balance sheets) do not really provide the right foundation for long term real sustainable growth.

Note: BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS.

Unaffordable housing: the nanny state fix we need

From The NewDaily.

Incoming NSW premier Gladys Berejiklian and federal Treasurer Scott Morrison have raised expectations they will actually do something about unaffordable housing.

With capital city median house prices cooling but still relentlessly rising there is broad consensus that supply, in the form of more land release and fast-tracked apartment development, will never bring acquisition costs down for young home buyers.

Demand is also relentless through population growth from migration and the natural birth rate. Australia is on track to reach 40 million people by 2055. The Sydney home-unit tsar Harry Triguboff has become Australia’s richest man tracking demand through migration and building blocks of flats to cash in.

Endemically low interest rates have pumped up prices in hotly competitive city real estate markets. The federal government has failed to stop the distorting impact of too-generous negative gearing with aggressive property investors now building substantial multi-dwelling portfolios. We are becoming a nation of landlords.

NSW Opposition leader Luke Foley on Friday produced State Revenue Office figures showing a 61 percent growth in investor-owned property over the past three years.

Premier Berejiklian has said an “average, hard working” person should be able to afford a home in Sydney. But first-home buyer numbers have dropped from 18 per cent in 2011 to 8 per cent of total purchases today.

Hey Barnaby … there are no jobs in Tamworth

Why can’t people abandon their aspiration for a harbour view and move to an eminently affordable house in Tamworth, Deputy Prime Minister Barnaby Joyce asked in his deeply superficial contribution to the national affordability debate.

The answer is that the jobs are in the cities. There are fewer jobs in Tamworth, as there are in all Australian regional towns.

To buy a house you need a job. A worker on $75,000 a year with no dependants or credit card debt can borrow $512,000 for housing on this income. That would buy this income earner a good house in Tamworth, but at current prices, only a studio or one-bedroom apartment over-looking an industrial bin (forget the harbour view) in Sydney. You can add in Melbourne, Brisbane, Adelaide, Perth and Hobart to this calculation with some variations.

Young couples, each in full-time work, can combine their incomes to go deeper into debt to acquire their first home, and many do. But the barriers to entry remain extortionate, leading to the recent ‘smashed avocado’ kerfuffle where a demographer provocateur, Bernard Salt, lamented that millennials now preferred to spend $22 on this delicacy rather than save up for a house deposit.

Young people have given up, staying at home with mum and dad or sharing accommodation indefinitely, well past their student days.

What are legislators for?

Treasurer Scott Morrison has been fact-finding in London to see how the UK has addressed the affordability problem. A package of measures could come in the May federal budget. In spite of dissent from some Liberal MPs, any reform is not expected to include confronting the market distortion of negative gearing.

Premier Berejiklian is gathering insights from the fine policy minds available to her in the NSW government and is expected to announce some lever-pulling soon. First-home buyers’ grants and stamp duty holiday concessions can help to get more young people deposit-ready to buy, but they compete in already hot markets further pushing up prices.

The answer is in legislation. This will be derided as ‘a nanny state’ solution by ideologues and rapacious developers but with the market having so demonstrably failed to deliver the dream of home ownership for ‘average, hard-working people’, now is the time for a state plan. After all, what are legislators for? Do they always have to stand around, thumb in bum and mind in neutral? Why do we pay their salaries and helicopter expenses?

Let us now see if Premier Berejiklian is prepared to enact laws to establish state-wide inclusionary zoning for affordable housing. This has been done in London and New York. This would establish a public land register for affordable and social housing. The Greater Sydney Commission, a NSW planning agency headed by Lucy Turnbull, has already recommended government mandating six district plans for affordable housing for low-income households ranging from $42,300 to $67,600 per year.

The Committee for Sydney, a think tank, has proposed that under-utilised land could be slugged with higher taxes to get private owners to release it from their speculative ‘land banking’ grip. Most affordable housing in London, both freehold and rental, is high density around transport hubs for easier job access.

In the UK there is a social/affordable housing bond market which could be adapted by the Australian equivalent state-owned housing finance corporations to kick start affordable housing development with the not-for-profit and private sectors including investment-hungry superannuation funds.

So the answer to unaffordable housing in Australia? L-A-W … law.

How globalisation brought the brutality of markets to Western shores

From The Conversation.

The story of contemporary globalisation is, at its heart, the story of how we created a vast and impoverished working class. It is abundantly clear that the dynamics behind this have now hit home. First Brexit, then Donald Trump. We have been told that these votes were a primal scream from those forgotten parts of society.

Both campaigns identified immigration as a core cause of worker impoverishment and social exclusion. Both argued that limiting immigration would reverse these disempowering trends. It is true that poverty remains high and has even been expanding in the UKand the US, but the cause, and the solution, lie far deeper.

According to the charity Oxfam, one in five of the UK population live below the official poverty line, meaning that they experience life as a daily struggle. In the US, the richest country in world history, one in five children live in poverty. In the UK, austerity has played a role but is not the only cause. According to a Poverty and Social Exclusion project published early in George Osborne’s first wave of austerity, the proportion of households that fell below society’s minimum standards had already doubled since 1983.

Poverty pay and working conditions are proliferating across the UK. A recent study of the clothing manufacturing sector around the city of Leicester found that employers often consider welfare benefits as a “wage component”, forcing workers to supplement sub-minimum wage pay with welfare benefits. In this sector 75-90% of workers earn an average wage of £3 an hour. Companies get round the law by paying cash-in-hand and by grossly under-recording the hours worked.

Worker rights no longer set in stone. Martyn Jandula/Shutterstock

Recent news about working conditions at Sports Direct, Hermes, Amazon, and others show that far from being an isolated case, the Leicester example is part of an increasingly common trend towards low-wage, exploitative practices, greatly facilitated by a state-directed reduction in trade union power.

Income attacks

Mainstream portrayals of globalisation present it as a relatively benign market expansion and deepening. But this misses out the bedrock upon which such growth occurs: the labour of new working classes.

Following the end of the Cold War, the global incorporation of the Chinese, Indian and Russian economies served to double the world’s labour supply. De-peasantisation and the establishment of export processing zones across much of Latin America, Africa and Asia has enlarged it even further. The International Monetary Fund calculates that number of workers in export-orientated industries quadrupled between 1980 and 2003.

This global working class subsists upon poverty wages. Forget the problems in the clothing sector around Leicester, The Clean Clothes Campaign found that textile workers’ minimum wages across Asia equate to as little as 19% of their basic living requirements. To survive they must work many hours overtime, purchase low quality food and clothing, and forego many basic goods and services.

Cut from the same cloth? Workers in Asia. Asian Development Bank/Flickr, CC BY-NC-ND

A core element of globalisation has been the outsourcing of production from relatively high-wage northern economies to these poverty-wage southern economies. This enables firms to pay workers on the other side of the world 20 to 30 times less than former, “native” workers. They can then pocket the very significant cost difference in profits. For example, Apple’s profits for the iPhone in 2010 constituted over 58% of the device’s final sale price, while Chinese workers’ share was only 1.8%.

Outsourcing is celebrated by proponents of globalisation because, they argue, rather than produce goods expensively, they can be imported much more cheaply. This is true for many economic sectors in the global north, of course, but the downside is that wages and working conditions in remaining jobs are subject to colossal downward pressure.

Not working

What can be done? Limiting immigration will have no effect on these global dynamics, and may exacerbate them. You see, if wages are pushed up by labour shortages after any block on immigration, then the pressure and the incentive for firms to further outsource production, or to relocate, will increase. The anti-immigrant rhetoric and the mooted solutions of Donald Trump, UKIP, and much of the UK Conservative party will not help native workers one bit. Nor are they intended to. Rather, they represent a divisive political strategy designed to keep at bay any criticism of a decades-long assault on workers’ organisations.

Trump’s solutions don’t solve the problem. EPA/MIKE NELSON

For a problem brought about by globalisation it should shock no one that the progressive solution to poverty wages at home and abroad must be a global one. One thing that could work is the establishment of living wages across global supply chains. This would increase the price of labour in the global south, which in turn would limit some of the downward pressures that poverty wages here exert upon global north workers’ pay and conditions.

Doubling the wages of Mexican sweatshop workers would increase the cost of clothes sold in the US by only 1.8%. Increasing them ten-fold would raise costs by 18%. That cost increase can either be borne by northern consumers, who are themselves increasingly suffering from the wage-depressing dynamics of globalisation, or by reducing, only slightly, outsourcing firms’ profits. The outcome depends on politics and an understanding from voters that the dynamics that pushed towards Brexit and Trump are rooted in the systemic dynamics of corporate-driven globalisation. Contrary to its supporters claims, this mode of human development is based upon the degradation of labour worldwide.

The key question here is whether companies can be convinced to raise, significantly, their workers’ wages? Given capitalism’s cut-throat competitive dynamics, probably not right now. But there are many workers’ organisations toiling to achieve such objectives across the globe. Recognising that success in these struggles would contribute to improving the conditions for workers in the global north is a small, but necessary, first step towards realising these goals.

Author: Benjamin Selwyn , Professor of International Relations and International Develpoment and Director of the Centre for Global Political Economy, University of Sussex

Net Rental Yields Under Pressure

We have updated our gross and net rental yield modelling to take account of recent results from our household surveys, which incorporates the latest movements in rental income, investment loan interest rates, and other costs including agency fees and other ongoing costs. This gives a view of the gross rental yield by state, as well as the net rental yield. We also estimate the after mortgage value of the property.

The average rental property has a gross rental yield of 3.83% (down from 3.9% in September 2016), a net rental yield of 0.22% (down from 0.4% in September 2016) and an average equity value (after mortgage) of $161,450 (compared with $161,798 in September 2016).

There are considerable variations across the country with Victoria and New South Wales both under water on a net yield basis. Tasmania offers the best net rental return.  We have ignored any potential tax offsets.

We can compare the results from the previous run in September. Of note NSW has now dropped into negative net yield territory.

There are a number of factors in play. These include rising interest rates on investment property, a number of new investment property owners, and a weak rise in rents (which tend to follow incomes more than home prices). Agency management fees, where applicable have also risen.

This means that many investors are reliant on the capital gains providing a return on their investment.

Next time we will look at some of the other data views, by segment, property and location. Many investors, in cash terms are loosing money.