CoreLogic RP Data released October housing market indices earlier this week which showed the recent trend of slowing capital gains continued through October.
Based on the index, capital city dwelling values were 0.2% higher over the month and 1.5% higher over the quarter.
The latest set of data takes the annual change in capital city dwelling values to 10.1% which is down from the recent peak of 11.1% recorded over the 12 months to July 2015.
Despite low inflationary pressures and a tapering growth rate across the housing market, the Reserve Bank kept the official cash rate on hold for the sixth consecutive month at 2.0%.
The ‘hold’ decision was likely to be a close one, and financial markets are now indicating the cash rate isn’t likely to change over the next six months.
Based on the decision to leave rates on hold, the Reserve Bank appears to be comfortable with the current level of economic stimulus and will continue to monitor economic conditions for any further deterioration
in the key readings.
With inflation remaining so low (1.5% across the all groups measure), the door remains open for another rate cut if the RBA thinks it necessary.
Dwelling approvals data was out this week as well which showed a 2.2% rise in September, largely driven by a 6.9% increase in apartment approvals.
The latest data takes the annual number of dwelling approvals to a new record high of 229,438 dwellings.
With the pipeline of housing stock yet to be commenced remaining high, the outlook for housing construction is looking healthy but likely to peak moving into 2016.
The high level of approvals will eventually translate into more housing stock flowing into the Australian market which should help to keep a lid on the fast of capital gains that have been evident in Sydney and Melbourne, while also providing a strong economic benefit to the nation.
In other news, retail spending figures were released by the Australian Bureau of Statistics
The value of retail spending was up 0.4% in September to be 3.7% higher than a year ago.
Adjusting for the effects of inflation, retail spending is 3.1% higher which is slightly ahead of both the five year and ten year pace of growth.
Over the week ending November 1st, CoreLogic RP Data reported on 2,288 auction results, comprising 90% of all auctions held.
The weighted average clearance rate across the capital cities was recorded at 61.0%, the lowest reading in 73 weeks.
Auction clearance rates have been trending lower since April this year, and if the current trend continues we will see auction clearances move into the high 50% range over coming weeks.
Overall auction numbers were down substantially from last week due to the Spring Racing Carnival and long weekend held in Melbourne.
Despite only 629 auctions being held in Melbourne, the clearance rate remained higher than Sydney’s at 65.6%.
In Sydney, 1,391 auctions were held over the week, which is the second largest number of auctions so far this year.
The clearance rate in Sydney was recorded at 60.2%, which is the lowest clearance rate since the last week of March in 2013.
The national number of newly advertised properties is -3.6% lower relative to the same period one year ago with 50,880 properties added to the listings pool over the past twenty eight days.
Across the combined capital cities new listings are -3.5% lower than they were at the same time last year.
Although new listings are lower than they were a year ago, they continue to trend higher as the Spring Selling Season progresses.
The largest surge in new capital city listing numbers has been seen in Hobart, where newly advertised stock levels are 11.4% higher than last year indicating a higher level of vendor confidence.
Five of the eight capital cities are seeing newly advertised listing numbers flow into the market at a slower pace than last year, suggesting vendors may not be as optimistic about the market as they were last year.
The weaker housing markets of Perth (-14.5%), and Darwin (-19.4%) continue to see the sharpest declines in new listings relative to a year ago.
Total stock levels nationally are now 2.7% lower than at the same time last year while across the capitals total stock levels are 1.6% lower.