February 2017 This monthly newsletter By David Martine, Secretary, Department of Treasury and Finance outlines economic and financial developments in Victoria, nationally and globally. Domestic developments Highlights Recent macroeconomic indicators point to ongoing Pace of economic growth in Victoria remains strong, strength in the economy, albeit some indicators albeit some indicators have moderated. have moderated. Residential building approvals continue to grow, Residential investment continues to grow, although although at a slower rate. at a slower rate. The value of residential building Victorian consumers continue to be optimistic. approvals grew by an average of 6.7 per cent over the year to December 2016. Ongoing demand for Victoria added almost 120,000 new jobs over 2016, detached housing plus alterations and additions is encouraging labour force participation. being partially offset by the moderation in apartment The IMF has left its global growth estimates construction. unchanged, but has raised its estimate of US growth. Demand for residential construction is supported by Uncertainty about the possible global consequences of continued population growth, low interest rates and US economic and trade policy decisions remain. high house price inflation which encourages new investment. The CoreLogic Home Value Index for Melbourne grew by 11.8 per cent over the year to January 2017. The monthly outturn indicates some moderation in annual price growth from the previous month, but remains high. Strong house price growth is reducing housing affordability. According to the Housing Industry Association, housing in Melbourne is more affordable than in Sydney, but less affordable than the other capital cities.
February 2017 This monthly newsletter outlines economic and financial developments in Victoria, nationally and globally. By David Martine, Secretary, Department of Treasury and Finance Highlights Pace of economic growth in Victoria remains strong, albeit some indicators have moderated. Residential building approvals continue to grow, although at a slower rate. Victorian consumers continue to be optimistic. Victoria added almost 120,000 new jobs over 2016, encouraging labour force participation. The IMF has left its global growth estimates unchanged, but has raised its estimate of US growth. Uncertainty about the possible global consequences of US economic and trade policy decisions remain. Domestic developments Recent macroeconomic indicators point to ongoing strength in the economy, albeit some indicators have moderated. Residential investment continues to grow, although at a slower rate. The value of residential building approvals grew by an average of 6.7 per cent over the year to December 2016. Ongoing demand for detached housing plus alterations and additions is being partially offset by the moderation in apartment construction. Demand for residential construction is supported by continued population growth, low interest rates and high house price inflation which encourages new investment. The CoreLogic Home Value Index for Melbourne grew by 11.8 per cent over the year to January 2017. The monthly outturn indicates some moderation in annual price growth from the previous month, but remains high. Strong house price growth is reducing housing affordability. According to the Housing Industry Association, housing in Melbourne is more affordable than in Sydney, but less affordable than the other capital cities.
Economic%20Update%20February%202017.docx