The Reserve Bank of Australia (RBA) released the minutes of their December board meeting earlier this week.
At the meeting, the RBA board decided to keep official interest rates on hold at 2.5% Specifically related to the housing sector the minutes noted:
‘Forward-looking indicators suggested that dwelling investment would pick up in the period ahead, even though data on work done pointed to a modest decline in measured new dwelling investment in the September quarter. Dwelling approvals had increased in all states over recent months and first home owner grants for new dwellings had been rising, following the redirection of state government incentives for first home buyers towards new construction.
Conditions in the established housing market had strengthened further. Housing prices had increased at an annualised rate of 15 per cent over the past six months, with the largest increases in Sydney, but prices in other cities had also picked up over recent months and auction clearance rates remained well above average. Loan approvals increased significantly in September and October, to be about 20 per cent higher over the year. In line with this, housing credit growth had been edging higher, especially for investors.’
The final statement of the minutes was also an important one: ‘The Board’s judgement remained that, given the substantial degree of policy stimulus that had been imparted, it was prudent to hold the cash rate steady while continuing to gauge the effects of earlier reductions, but not to close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity, consistent with the inflation target. The Board would continue to examine the data over the months ahead to assess whether monetary policy remained appropriate.’
The federal government released the Mid Year Economic and Fiscal Outlook (MYEFO) earlier this week…
The Outlook forecasted a $47 billion budget deficit this year, up from $30.1 billion at the time of the previous forecast.
The outlook forecasts GDP of 2.5% this financial year, rising to 3% in 2015/16 and 2016/17. Unemployment is forecasted to be at 6.0% this financial year and then to rise to 6.25% in 2014/15 and remain there for the following two financial years.
The Australian Bureau of Statistics (ABS) released demographic statistics for the June 2013 quarter this week.
The data showed that Australia’s population increased by 95,732 persons over the quarter and 407,027 persons over the 12 months to June 2013. The current rate of annual population growth is the fastest since September 2009.
The rate of annual population growth has increased by 6.0% over the year with natural increase rising by 2.4% and net overseas migration up by 8.6%.
National Auction Clearance Rates
The number of auctions across the combined capital cities was at a record high level last week with 3,472 auctions, up from 2,716 auctions the previous week. The combined capital city auction clearance rate increased over the week from 65.4% the previous week to 66.9% last week. In Melbourne, there were 1,598 auctions last week, up from 1,172 over the previous week. Melbourne’s clearance rate increased from 65.1% the previous week to 67.9% last week. Auction volumes across Sydney also increased over the week from 1,060 the previous week to 1,402 last week. Auction clearance rates fell over the week from 74.0% the previous week to 72.7% last week, Sydney’s lowest auction clearance rate in 22 weeks. This week is set to be another busy auction week with 3,031 capital city auctions scheduled to take place.
Weekly Advertised Listings
Over the four weeks to 15 December 2013, there were 44,829 newly advertised properties listed for sale nationally. The number of new property listings fell by -4.8% over the week and new listings are currently -0.7% lower than at the same time last year. Across the combined capital cities, new listings were -11.6% lower over the week and they are -0.3% lower than they were a year ago.
There are currently 263,424 properties listed for sale across the country. Total listings at a national level were -0.8% lower over the week and they are -4.1% lower than they were at the same time last year. Across the combined capital cities, total listings have fallen by -2.7% over the week although they are -9.5% lower than they were at this time a year ago. Capital city listings account for around 43% of all listings nationally