What Domain's report and the unemployment rate mean for house prices

The report released by Domain Holdings Australia Ltd (ASX:DHG) and the latest unemployment figures mean for house prices.

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Yesterday we got a good look at the Domain Holdings Australia Ltd (ASX: DHG) report and learned what the latest unemployment figures were from the ABS.

Domain result

My colleague Phil Harpur covered the Domain result here, but I'm going to look at a couple of key numbers.

Overall its earnings per share (EPS) fell by 38.3%, but it's the digital segment in-particular that I want to focus on.

There was a 5% like-for-like decline in residential revenue, which it said was a solid result in the context of a challenging market environment, with total market residential listings down around 12%. However, it did manage to increase the number of agents on paid depth contracts.

Domain said that trading in January 2020 had seen a soft start, although there have been "early signs" of improving property market activity since the Australia Day weekend.

Unemployment

The latest unemployment numbers came out from the Australian Bureau of Statistics (ABS).

In January 2020 the unemployment rate increased by 0.2% to 5.3% with the number of unemployed increasing by 31,000 people

One of the main things that that RBA looks at when making decisions about interest rates is the unemployment. A worsening of the situation may see an interest rate cut come this year, sooner than people were expecting, particularly with the coronavirus continuing to affect China.

What about house prices?

Less supply of houses for purchase should mean higher house prices, they are continuing to rise. Lower interest rates may also mean stronger house prices, though higher unemployment wouldn't be a positive for house prices.

Plenty of ASX shares depend on a strong-performing housing market for a good performance from banks like Commonwealth Bank of Australia (ASX: CBA) to building product companies like CSR Limited (ASX: CSR).

However, like with the share market, I think it's extremely hard to predict what will happen with house prices with all of these different variables.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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