The Reserve Bank (RBA) board held their monthly monetary policy meeting on Tuesday where they decided to keep official interest rates on hold at 2.5%. The overall statement following the meeting was quite short however, there were some interesting points.
‘The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values. The full effects of these decisions are still coming through, and will be for a while yet.
The pace of borrowing has remained relatively subdued overall to date, though recently there have been signs of increased demand for finance by households.
There is also continuing evidence of a shift in savers’ behaviour in response to declining returns on low-risk assets. Housing and equity markets have strengthened further, trends which should in time be supportive of investment.
The Australian dollar, while below its level earlier in the year, is still uncomfortably high.
A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy. At today’s meeting, the Board judged that the setting of monetary policy remained appropriate.
The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.’
The Australian Bureau of Statistics (ABS) released building approvals data for September 2013 late last week. The data showed that new housing activity is continuing to gather some momentum with dwelling approvals rising by 14.4% over the month to be 18.6% higher year-on-year.
The monthly data is quite volatile however, if you look at the annual number of dwelling approvals, they are up 12.5% over the year and are now at their highest level since July 2011.
Both houses and units have shown an increase in their annual approval numbers however, units (22.6%) have recorded a much greater rise than houses (6.1%).[sam id=31 codes=’true’]
The ABS released retail trade data for September 2013 which showed an unexpectedly strong increase in consumer spending. Retail trade increased by 0.8% over the month, was 1.4% over the quarter and has increased by 2.9% year-on-year.
Looking at the year-on-year increases, the main benefactors of the growth have been: clothing, footwear and personal accessories (6.9%), food retailing (3.7%) and cafes, restaurants and takeaway food services (3.6%).
Trade increases have been much more moderate for: household goods retailing (0.4%), other retailing (1.3%) and department stores (1.7%).
The ABS also released labour force statistics for October 2013 earlier this week. The data showed that the national unemployment rate on a seasonally adjusted basis was unchanged over the month at 5.7% (note that the September unemployment rate was lower when reported at 5.6% however, that has been revised higher to 5.7%) however, the employment participation rate fell again to 64.8%, its lowest level since October 2006.
Without the lower rate of worker participation in the labour force, the unemployment rate would be higher. Over the past year, the number of persons employed full-time has fallen by 59,500 while part-time employment has increased by 148,700 persons.
National Auction Clearance Rates
The number of auctions across the combined capital cities fell significantly last week from 2,941 over the previous week to 1,668 auctions last week. The auction clearance rate fell over the week from 71.8% the previous week to 70.3%.
In Melbourne, there were just 196 auctions over the week, well down on the 1,619 auctions over the previous week.
Melbourne’s clearance rate fell to 70.8% last week from 71.9% over the previous week. Auction volumes across Sydney increased over the week from 927 the previous week to 1,105 last week. Auction clearance rates fell over the week to 75.0% from 79.7% over the previous week. There are currently 2,398 capital city auctions scheduled for the current week.
Weekly Advertised Listings
Over the four weeks to 3 November 2013, there were 49,920 newly advertised properties listed for sale nationally, the highest number since December last year.
The number of new property listings increased by 2.1% over the week and are 0.5% higher than at the same time last year. Across the combined capital cities, new listings were 2.0% higher over the week and are 3.5% higher than they were a year ago.
There are currently 267,114 properties listed for sale across the country, the highest number of property listings since December last year. Total listings at a national level have increased by 1.7% over the week and they are -0.3% lower than they were at the same time last year.
Across the combined capital cities, total listings have increased by 2.5% over the week and they are -10.2% lower than they were at this time a year ago. Capital city listings account for around 44% of all listings nationally.