The Reserve Bank (RBA) released the minutes of its June board meeting earlier this week.
At the meeting the RBA board decided to keep official interest rates on hold at 2.0%.
Some highlights from the minutes are detailed below:
‘Members observed that the Australian Government Budget for 2015/16 had outlined a number of years of slightly larger deficits than had been forecast in the Mid-Year Economic and Fiscal Outlook update in December 2014.
This mainly reflected lower commodity prices and weaker-than-expected growth of incomes.
Members were informed that the budget policies were little different from what had been assumed for the forecasts presented in the May Statement on Monetary Policy.
Members discussed the importance of including the fiscal positions of the states and territories in any assessment of the effect of fiscal consolidation on the aggregate economy.’
Dwelling investment looked to have grown strongly in the March quarter and forward-looking indicators of construction activity pointed to a further pick-up.
Members noted that conditions in the established housing market had continued to vary across the country.
Although housing price inflation had remained high in Sydney and, to a lesser extent, in Melbourne over recent months, there had been some divergence in price developments for different segments of these markets; price inflation of detached houses had increased, whereas price inflation for units had eased in both cities.
Noting that housing price growth in other cities and regional areas had declined over recent months, members discussed the strength and composition of underlying supply and demand conditions in different parts of the housing market.
They also observed that there was a relatively low stock of dwellings for sale in Sydney and Melbourne and that dwellings took only a short time to sell.
Members noted that housing credit growth overall had been broadly steady at around 7 per cent (on a six-month-ended annualised basis), though the latest data on loan approvals had showed a pick-up.
Over the past six months or so, growth in investor credit had eased back to be running at an annualised pace of a bit above 10 per cent.
However, over more recent months there had been solid increases in housing loan approvals to both owner-occupiers and investors, particularly in New South Wales, following earlier declines.’
CoreLogic RP Data was tracking 2,076 auctions over the past week, which was a large jump from the 1,201 auctions the previous week which can be attributed to the Queens’ Birthday long weekend.
The weighted average clearance rate across the capital cities was 75.9%; the 14th consecutive week where the combined capitals clearance rate has been above 75%.
The largest auction market, Melbourne, saw 947 auctions held last week with a clearance rate of 77.7%.
While auction volumes were higher than the previous week it was the city’s lowest clearance rate in 9 weeks.
In Sydney there were 816 auctions with a clearance rate of 83.4% last week.
Auction volumes rose over the week while the clearance rate was its lowest in 9 weeks.
Sydney auction clearance rates have now been above 80% each week since the Reserve Bank cut official interest rates by 25 basis points at the start of February 2015.
The number of new homes being advertised for sale has fallen over the past week while total listings have recorded a sharp decline over the week.
Total listings nationally are -6.3% lower than the number from a year ago while capital city listings are -8.6% lower.
Over the past four weeks there have been 40,493 newly advertised properties added to the market which is -1.4% fewer than at the same time one year ago.
A similar trend can be seen across the capital cities where 24,780 new listings hit the market over the past four weeks which is -2.6% lower than at the same time last year.
The number of new listings is lower currently compared to the same time in 2014 across all capital cities except Melbourne and Brisbane.
Meanwhile, although capital city stock is lower than a year ago, it is being fuelled by a significant decline in listings compared to a year ago in Sydney (-25.3%) and to a lesser degree Canberra (-15.1%) and Melbourne (-13.4%). Perth (+13.5%) and Darwin (+29.9%) are the only two capital cities in which total listings are higher than they were a year ago