Super Investments can be switched very fast and this is the reason for bumps in valuations. Many investors try their hand at speculative switches. In doing so fundamentals, that is the political / economical landscape should be given due attention. The informed investor should pay attention to metrics such as interest, CPI, GDP and unemployment rates.

In this post we look at interest and unemployment. International interest remains low. Europe has just hit rock bottom. Interest in Australia is not expected to go up any time soon, unless people go crazy on property values. The main reason is that unemployment is not expected to get substantially better until 2016. There was a positive surprise in August bringing official unemployment back to 6.1%, but that was mostly due to a huge surge in part time employment. Its too early to judge if unemployment is getting  better sooner than later. 

Acc to ABS Victoria sits at ca 7% and just wait for Ford and Holden to leave ! Acc to Roy Morgan Australia shows 8.7% unemployed and 8.8% underemployed in August ! This should keep a tab on under median level house prices.

http://www.businessspectator.com.au/article/2014/8/11/australian-news/truth-about-australias-unemployment-rate-shocker

http://www.roymorgan.com/morganpoll/unemployment/rmr-vs-abs-estimates

http://www.news.com.au/finance/economy/australian-unemployment-rate-in-august-was-61-per-cent/story-e6frflo9-1227055105529


Full-time employment rose 14,300 to 8.094 million in August and part-time employment was up 106,700 to 3.609 million. The participation rate — those that have a job, are looking for work or are ready to start work — rose to 65.2 per cent, from 64.8 per cent in July.

By state, the jobless figures were: 

• NSW — 5.7 per cent, down from 5.9 per cent
  
• VIC — 6.8 per cent, down from 7.0 per cent
  
• QLD — 6.7 per cent, down from 6.8 per cent
  
• SA — 5.9 per cent, down from 7.2 per cent
  
• WA — 5.0 per cent, down from 5.2 per cent
  
• TAS — 7.1 per cent, down from 7.6 per cent
  

Meanwhile, Seek reported a 3.5 per cent increase in job ads in August, led by non-mining sectors.

Some house price forecasts do give reason for concern. Let's start with a 6 month old SMH article supported by statistics and graphs. And then look at today's BIS warnings that have hit the news. On the other hand the Australian plays down fears. Auctions this weekend are sky high (Melbourne?). Watch here. Looking for a contrarian view - read here. 

(1) To sum it all up stats are often used selectively to prove a point. 
(2) Spring is here. I still expect a little surge. 
(3) Short term behaviour is always erratic.
(4) Lower end affordable housing in capital cities should be a pretty safe bet.

For SMSF's invested in residential pproperty long term returns should be at least 8%. Allow 4% for capital growth and 4% lease income (rent). This is a pretty good and stable return and a respectable alternative to the equally well or slightly better performing but much more volatile share market.