NO PROPERTY CRASH? Why Rising Unemployment Could Push Property Prices Higher

This week on MOTM, we unpack two of the biggest economic headlines of the week, the 5.97% minimum wage increase that lifts the minimum above inflation for the first time in several years, and the shock 4.5% Australian unemployment rate. Together, these two data points point clearly toward the next move from the Reserve Bank of Australia, and what that move means for property prices.THE BREAKDOWNThe RBA has two inputs that materially affect its rate decisions: inflation and unemployment. Inflation is broadly tracking near target. Unemployment surprised on the upside, climbing to 4.5%. Most major bank economists had forecast 4.3%. Layered over that is the federal minimum wage increase of 5.97%, taking the minimum wage above $1,000 a week and $52,000 a year for the first time. The increase is welcomed at the household level. At the macro level, the same increase adds friction to entry-level hiring decisions and reduces employer willingness to take a risk on new staff. That dynamic will likely push the unemployment rate higher rather than lower over the coming months.The combination points to a rate cut from the RBA before the end of the year. A cut would reduce mortgage repayments, lift borrowing capacity, and re-enter cohorts of buyers who have been on the sidelines for most of 2025 and 2026. The structural undersupply of Australian housing remains intact, so the most likely outcome of a rate cut is support for existing property values rather than a fall. Brodie and Darren also unpack the wealth divide implication, namely that minimum wage earners are not the cohort entering the property market.In this episode, we chat about:- What the 5.97% minimum wage rise actually changes in practice.- Why the 4.5% unemployment figure was a shock to most forecasters.- Why a $57 a week pay rise is worth less to most borrowers than a 0.25% rate cut.- Why minimum wage earners are not the cohort buying property.- How a rate cut later this year would change buyer activity.- Why property prices themselves do not trigger RBA decisions.- The forecast: where unemployment, inflation, and rates land by the end of 2026.CHAPTERS00:00 Wage Rises Meet 4.5% Unemployment00:30 What the Minimum Wage Increase Actually Means02:00 Why $57 a Week Versus a Rate Cut Is the Real Question03:30 Youth Unemployment and Entry-Level Hiring Pressure05:00 Why the RBA's Next Move Is Likely a Cut06:30 Why a Bad Employment Headline Could Be Good for Property08:00 Who Actually Benefits From a Rate Cut10:00 Why Property Prices Don't Trigger RBA DecisionsCONNECT WITH FUNDDGot a question? Drop it in the comments below or reach out to the team via our website https://fundd.com.au/contact/.Follow us on Socials:FacebookInstagramLinkedinThis podcast provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.All information is correct at the time of filming.