The year that was and another year ahead – an economic update
December 19th, 2012 | Economic outlook
After another year of a very unstable global economy, the next 12 months are looking bright. In our last e-newsletter for 2012, we take a look at Australia’s economic performance during 2012 and outlook for 2013.
In 2012 the global economy continued to limp along, with the ongoing European debt crisis and poor world wide economic growth having a negative effect on buyer confidence in Australia. The Australian economy suffered, with the mining sector falling short of expectations and the housing industry failing to perform. Despite this, Australia’s economy has remained fairly resilient to overseas global economic woes.
According to the latest QBE LMI Housing Outlook figures, median house price growth across most of the capital cities experienced its second year of decline in 2012, with weighted average median house prices falling by 2.6 per cent across the capital cities. Marginal falls occurred in Sydney which recorded a 0.7 per cent drop. Interestingly, Darwin however was the winner with a recorded rise of 10.7 per cent.
These falls created a negative impact on consumer confidence, and although the number of first home buyers rose by 14 per cent during the year, the overall number remained low following a 47 per cent decline in the two years to 2011. We did see however a number of unchanged interest rates or rate cuts, as well as lowering or holding of cash rates, providing a continuing source of optimism for property investors.
A brighter year ahead
The outlook for 2013 seems brighter, especially for the housing sector. Price growth is forecast to improve in the coming months, with median house prices expected to steady in 2013, helped along by a series of rate cuts which should improve affordability and investor confidence (source: QBE LMI Housing Outlook Report).
GDP – which rose from 1.9 per cent in 2011 to 3.4 per cent in 2012 – is forecast to increase, with benefits flowing down to the broader economy. “While there are some external risks such as global financial stability and commodity prices, most of the resource investment is already underway and should continue to rise through to completion over the next two to three years”, the report said. “Unemployment is forecast to fall and income growth should remain solid, which will underpin private consumption and expenditure levels”.
As we look towards a new year, we can only hope that Australia’s economic climate will continue to grow positively, and remain resilient from overseas economic conditions.
With this in mind, the staff at Quinn Financial Planning and The Quinn Group wish you a happy and prosperous 2013. We look forward to providing more informative e-newsletters to our clients in the New Year, and continuing to assist you with your accounting, financial planning and legal needs in 2013.
Here at The Quinn Group our experienced team of Financial Planners, Accountants and Lawyers can provide you with the total solution and assist you with all your taxation, legal and financial planning needs. For more advice on your financial goals for 2013, contact contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.
The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.