The Reserve Bank of Australia published the minutes of the June Board meeting this week. At the meeting the Bank decided to keep the cash rate on hold at 2.75%.
The Minutes highlighted the fall in the Australian dollar, which is currently around the US$0.95 mark, down about 14% from the July 2011 high.
The RBA is welcoming the lower dollar as it will provide some welcome relief to exporters, particularly the Australian manufacturing sector.
Potentially the lower Australian dollar could create some inflationary pressures due to the higher relative cost of imports, however the Reserve Bank forecast for inflation remains within their target range of 2 to 3 per cent over the next year.
The Reserve Bank has left the door open for further rate cuts, stating “The Board also judged the inflation outlook as currently assessed might provide some scope for further easing, should that be required to support demand.”
The ASX cash rate futures yield curve is continuing to imply a further twenty five basis point rate cut which will eventuate around the time of the Federal Election in September this year. Most economists are also tipping that the cash rate could drop by a further 25 basis points before the end of the year.
[sam id=36 codes=’true’]Data on new vehicle sales was also released this week which showed a relatively flat market for car sales after posting four months of declining transactions numbers. The news isn’t all bad for car sales though. Sales are slightly higher over the year with 1.13 million new cars sold across the country; the highest annual number of sales on record.
Demographic data was released by the Australian Bureau of Statistics this week showing population growth continued to accelerate over the December quarter last year. The annual rate of population growth was recorded at 1.75% which was the fastest expansion in national population for three years.
Western Australia continues to record the fastest rate of population growth at 3.5% followed by the ACT (2.3%), Queensland (2.1%) and Northern Territory (1.8%). Tasmania (0.8%) and South Australia (0.95%) are recording the slowest rate of population growth.
National Auction Clearance Rates
The auction market returned to normal last week after the number of auctions slumped over the previous long weekend. The weighted average clearance rate last week was recorded at 65.7%, which is about level with the average over the past two months and up from 61.4% the previous week.
Australia’s largest auction market, Melbourne, recorded 861 auctions last week with a clearance rate of 69%. There were 563 auctions held in Sydney over the past week with a clearance rate of 76%.
In Brisbane (Australia’s third largest auction market) there were 180 auctions held which is the largest auction week since late March earlier in the year. Despite the increase in auction numbers, the clearance rate remains sedate with just one third of all Brisbane auctions showing a successful outcome under the hammer.
Advertised Stock on the Market
Note: This week you will notice a change in our count of national and capital city listings data. This is due to an update in the methodologies used to source, deduplicate and count the number of homes being advertised for sale across the country.
Our estimate shows 242,324 properties being advertised for sale across the country, which is about 12.3% fewer than at the same time last year.
Across the capital cities the largest reduction in total listings numbers can be seen in Sydney where there are one third fewer homes on the market now compared with a year ago.
Brisbane is recording 19% fewer listings and Perth is recording 17.5% fewer homes being advertised for sale. The only capital city showing an increase in listing numbers over the year is Canberra.
The number of new listings being added to the market is 10.5% lower nationally now compared with a year ago an d 8.3% lower across the capital cities. Perth is the only city to record an increase in the number of new listings being added to the market, with new listing numbers up 6.6% compared with a year ago.