The failure of home sales to respond to conditions that would otherwise seem favorable to home purchases indicates that there are other factors weighing on demand for owner-occupied homes. High levels of unemployment and weak income prospects are likely precluding many households from purchasing homes. In addition, some potential buyers may be delaying house purchases out of fear of purchasing into a falling market.
Growth in the economy over the past couple of years, and particularly last year, was concentrated mainly in predominantly labour intensive sectors, namely construction and services, with a correspondingly weaker productivity performance. While the overall performance of the economy has been positive, the relatively unbalanced nature of growth in recent times is a concern, particularly the modest developments in productivity.