“If Australia fails to reach a vaccination rate well above 80 per cent in 2022 or more dangerous variants of the virus emerge, then the buoyant prospects for a very strong bounceback in the Australian economy may fade,” he said.
This week, official employment figures are expected to show the disappearance of up to 70,000 jobs due to the impact of lockdowns on the labour market. The unemployment rate, which fell to 4.6 per cent in August, is tipped to rise back over 5 per cent.
Dr Lowe is expected to use his speech to touch on both the long-term impact of the pandemic on the jobs market as well as the nation’s hot property market.
Sydney’s median house price is now $1.3 million, up by more than $300,000 over the past 12 months, while in Melbourne, it has climbed by $157,000 to $955,000.
Data from CoreLogic shows that through the first 12 days of September, the value of dwellings across Sydney has climbed 0.8 per cent while in Melbourne, it’s increased 0.3 per cent.
Despite the sharp lift in prices and average mortgage sizes, key measures of household debt have been held down, in large part due to the RBA’s ultra-low interest rate settings. The cash rate is at 0.1 per cent with the RBA saying it expects it to remain at that level into 2024.
But CoreLogic’s head of research, Tim Lawless, on Monday said it appeared the surge in prices, coupled with slow wages growth, would start to push up debt levels.
“Considering the pace of growth in housing credit against a backdrop of soft income growth, in all likelihood, household debt will be at or close to record highs by the end of 2021,” he said.
The ratio of owner-occupier debt to annualised household income is now at a record 100 per cent. Offsetting that has been the surge in house prices, which has pushed the ratio of household assets to household disposable income to a record high of 1045 per cent.
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