2016: Property down 6.1%, stocks down 8%

It would be fair to say that as we enter into February in 2016 the economic outlook is a little gloomy—especially for those of us that live in Western Australia.

Today the stock market fell 2.3 percent in the one day. So far in 2016 the stock market is down 8 percent. Those forecasters that predicted the stock market would test the 4,500 mark by mid-year will be feeling pretty pleased with their predictions. Those forecasters that predicted a return to the 5,400 line by the end of March will be feeling a little bit silly. But who knows, maybe there is a big up-tick hiding in the shadows and we might see the All Ordinaries index back to 5,400 by the end of March.

For one I certainly hope so because this falling market is playing hell with my superannuation balance. I now have less superannuation in my fund than I had at the start of 2015 despite the fact I have been putting money into it since May this year.

People betting on real estate in Western Australia are not doing much better. While real estate in NSW, Vic, SA, and Qld is more or less doing okay, those of us watching the value of our homes go down in WA, NT, and Tas need some consoling.

While a small number of WA suburbs held their value, most suburbs suffered a decline in 2015. The average value of properties in WA fell by 6.1 percent in 2015, and are predicted to fall by as much as a further 4 percent in 2016. At the end of January there were ten house on the visible market for every one home buyer looking to buy. If you blend in the unlisted market (people selling privately or without advertising), then there are 14 houses available for every home buyer out there looking to buy a house.

Home buyer ratios as low as this have not been seen for over 20 years. And this is despite the once-in-a-lifetime low interest rates currently on offer.

While there are officially less people out of work, by a small margin anyway, the bulk of these new jobs are casual or part time. If the jobless rate were measured against full time employment, then the number of people out of full time work has increased by just over one percent nationally and by a whopping three percent in Western Australia during 2015.