AT the height of the mining boom, Newcastle and the broader Hunter region found itself in the unusual position of having stronger employment figures – and lower unemployment rates – than the national average.
Traditionally, as a regional centre, the Hunter had struggled to match the big capital cities, especially, when it came to work. But for a few years at least, the jobs were there almost for the asking, and the economic good times were reflected in high levels of consumer spending and strong real estate gains.
Now, however, there are some dark signs on the economic horizon. Unemployment rates in Newcastle and the rest of the region are at their highest levels in more than 18 months, with the Newcastle and Lake Macquarie rate at 7.2 per cent and the rest of the region at 7.6 per cent. Meanwhile, the national jobless rate remains steady at 5.6 per cent.
University of Newcastle economist Professor Bill Mitchell says Newcastle has deteriorated against the national performance, even though the national performance has been “only mediocre”.
Professor Mitchell cites three main trends – flat wages growth, rising energy prices and record levels of household debt – as brakes on the economy.
For a long time, historically modest property prices in the Hunter region protected families on modest incomes from housing stress, but the extraordinary growth in national house prices, together with Newcastle’s growing popularity in this post-steelworks era, means that houses in this region are bringing formerly unimaginable prices. The latest housing figures actually show a slight fall in house and apartment prices in the three months to the end of September, but this follows a 20 per cent increase in the year to July 31, and a full 40 per cent increase over four years.
A flat wages outlook, however, means that the real increase in housing costs is even higher for the majority of borrowers who rely on wages to pay the bills. In response, mortgages are stretching from 25 years to as long as 40 years to make repayments manageable.
In such a climate, the need to acquire, or hold onto, a permanent full-time job becomes all the more pressing. And for those who are still renting, the task of saving for a deposit becomes a great deal harder.