The Australia Bureau of Statistics (ABS) released building approvals data for March 2016 earlier this week.
The data showed that over the month there were 19,371 dwellings approved for construction nationally.
Dwelling approvals were at their highest level in five months however, they are -7.1% lower than their May 2015 peak.
Looking at approvals split by houses and units, there were 9,865 houses and 9,506 units approved in March 2016.
Over the month, house approvals have increased by 2.4% and unit approvals rose 5.1%. Year-on-year, house approvals have fallen by -0.8% while unit approvals have fallen by -11.8%.
The Reserve Bank (RBA) held their May board meeting earlier this week and at the meeting, they reduced the official cash rate by 25 basis points to a record-low 1.75%.
In their statement following the meeting the RBA noted that inflation has been low for quite some time and that the recent data was unexpectedly low.
The expectations is that inflation will remain lower than previously forecast.
Subsequently, the Board determined that an interest rate cut was necessary in order to maintain sustainable growth and to return inflation to target.
The Board also noted that due to the regulatory changes which have strengthened lending standards the potential risks of lower interest rates re-inflating the housing market were less than they were a year ago.
The Federal Budget was released by the Government earlier this week.
While it contained nothing specific for the residential property market some of the changes to superannuation rules may impact on housing, particularly from an investment perspective.
The superannuation changes included: a $1.6 million cap on transfers into tax-free retirement phase accounts, the 30% tax on concessional contributions to those earning over $250,000 will be extended, the annual cap on concessional superannuation contributions will be reduced to $25,000 and a lifetime non-concessional contributions cap of $500,000 will be established.
The impact this may have is that it makes it less attractive for higher income earners to invest in superannuation and subsequently they may look to other investment classes (such as residential property) to invest in.
Over the week ending May 1 there were 2,675 capital city auctions with CoreLogic collecting results for 2,458 auctions, accounting for almost 92% of all auctions held.
The final clearance rate was recorded at 69.4% which was down from 69.7%.
The number of auctions increased from 1,565 over the previous week.
Last week, across Melbourne, typically the largest capital city auction market, 1,404 auctions were held with a clearance rate of 73.5%. Melbourne’s clearance rate increased from 73.5% and was at its highest level in nine weeks.
Sydney’s auction clearance rate was recorded at 71.7% across 818 auctions compared to a clearance rate of 77.4% across 643 auctions the previous week.
Across the remaining regions, clearance rates rose over the week in all markets except Canberra and Tasmania.
Note that sales listings are based on a rolling 28 day count of unique properties that have been advertised for sale.
Relative to the same period last year, the number of new listings over the past twenty eight days is 2.5% higher on a national basis and the total volume of stock on the market is -1.7% lower.
Across the combined capital cities, new listings are 0.9% higher relative to last year, while total listings are 5.1% higher.
On a city by city basis, only Sydney (-8,4%) and Darwin (-11.7%) are seeing a lower number of new listings than a year ago while Perth new listings are unchanged suggesting vendors elsewhere continue to have a level of confidence in selling within their markets.
In terms of the total stock available for sale, Melbourne (-1.6%), Hobart (-27.0%) and Canberra (-17.3%) are the only capital cities to have fewer total properties for sale than a year ago.
Nationally, both new and total listings are at their highest level in 5 weeks.
Across the capital cities, new listings are at their highest levels in 6 weeks and total listings are at their highest level in 5 weeks.