According to the ANZ-Roy Morgan weekly Australian Consumer Confidence release earlier this week, confidence rose slightly up 0.1% over the week ending 25 October 2015.
Since the change of Prime Minister the Index has been trending higher with renewed consumer confidence.
The ANZ noted in their media release that the slight increase over the week was a little surprising given that each of the Big 4 banks had announced increases to their variable mortgage rates during the week.
Consumer confidence sits at just above its long term average
Over the past two weeks each of the Big 4 banks lifted their standard variable mortgage rates outside of a move by the Reserve Bank (RBA).
The increases ranged from 15 basis points to 20 basis points across both owner occupier and investor mortgages, reportedly in response to the requirement for banks to hold more capital.
It is widely viewed that these moves will act as a further disincentive to buyer demand across the housing market and will provide the RBA with scope to cut official interest rates further if required over the coming months.
The ASX cash rate futures market is currently pricing in a 31% chance of an interest rate cut in November with an expectation that the cash rate will fall by 25 basis points by February next year.
The Australian Bureau of Statistics (ABS) released September 2015 quarter Consumer Price Index results earlier this week
The data showed that headline inflation was recorded at 0.5% over the quarter and has increased by 1.5% over the past year.
The Reserve Bank (RBA) has a target range for inflation of between 2% and 3% on an annual basis so headline inflation is currently lower.
Importantly, the RBA also likes to look at underlying inflation which strips out some of the more volatile items.
The two measures of underlying inflation, the trimmed mean and weighted median, were both recorded at 0.3% over the quarter.
Over the past year, the trimmed mean was recorded at 2.1% and the weighted median at 2.2% both of which are at the lower end of the RBA’s target range for inflation.
Given this the latest CPI data provides the RBA with the scope to cut official interest rates if they feel that i t is necessary.
Over the week ending October 18, CoreLogic RP Data captured 2,814 auction results, accounting for almost 90% of all auctions held across the capital cities.
The final auction clearance rate over the past week was recorded at 64.9%, down from 67.4% over the preceding week and lower than the 69.3% clearance rate a year ago.
Melbourne’s clearance rate was 69.7% across 1,579 results, down from 72.7% across 1,398 results the previous week. Sydney’s clearance rate was down for the fourth consecutive week, from 63.7% the previous week to 61.3% last week, the lowest figure since March 2013.
There were 1,024 auctions held across Sydney last week, with 887 results captured.
Melbourne has now had a higher rate of auction clearance than Sydney for seven consecutive weeks.
It was the first time since December last year that both Sydney and Melbourne had a clearance rate below 70%.
The national number of newly advertised properties is -5.5% lower relative to the same period one year ago with 48,247 properties added to the listings pool over the past twenty eight days.
Across the combined capital cities new listings are -6.4% 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.
While new listings are lower than a year ago, Sydney and Canberra continue to see an increase relative to last year, 0.3% and 3.7% higher respectively.
The weaker housing markets of Perth (-22.4%), and Darwin (-13.6%) continue to see the sharpest declines in new listings relative to a year ago as vendor confidence weakens.
Total stock levels nationally are slightly lower than levels a year ago, -2.6% lower nationally and -1.9% lower across the combined capital cities.
Total stock levels in Sydney, Perth and Darwin are now higher than they were a year ago while stock for sale is lower across all other capital cities.
In Sydney, total listings are at their highest level since early December last year and rising.