Here’s this week’s property market wrap…
The Reserve Bank (RBA) released the minutes of their monthly board meeting for November earlier this week.
At the meeting, the RBA’s board decided to keep official interest rates on hold at 2.5% for the 15th consecutive month.
Relating to the housing market the minutes noted:
‘Low interest rates and ongoing population growth were expected to continue to support growth in both housing activity and the established housing market. Growth in dwelling investment had remained strong and this was expected to continue in coming quarters, based on building approvals and other forward-looking indicators.
Housing price growth had slowed from the rapid pace of late last year, but was still high in Sydney and Melbourne. While growth in housing credit for owner-occupiers was only a little above that of income, credit extended to investors had continued to grow at a noticeably faster rate.
Members noted that the strength in the housing market was expected to give some support to household consumption in the near term as rising housing valuations allowed some credit-constrained home owners to bring forward their consumption.
The pick-up in retail sales in the September quarter and stronger growth in retail sales in those states with more rapid housing price growth was consistent with this view. However, members also observed that expectations of low income growth would be likely to weigh somewhat on consumption, which was expected to continue growing at a moderate pace in the near term before strengthening over 2016.’
The minutes of the meeting flagged that the RBA felt the most prudent course was for a period of interest rate stability.
The RBA’s Governor Glenn Stevens delivered a speech entitled ‘Economic Possibilities’ (http://www.rba.gov.au/speeches/2014/sp-gov-181114.html) earlier this week.
The speech is worth a read. The key points relating to housing were: investment in new and existing dwellings is rising, construction activity has risen and the RBA is aiming to keep a higher level of new supply for a longer period, dwelling prices are up about 18% from their recent low and prices have risen in each city albeit with significant variation.
The speech also flagged that the RBA is working with other agencies to see what more could be done on lending standards. The Governor specifically noted, ‘it’s helpful if pockets of potential over-exuberance (in housing investment) don’t get too carried away.’
Weekly Auction Clearance Rates
CoreLogic RP Data recorded 2,907 auctions results across last week which accounted for 87% of all auctions held.
The weighted average auction clearance rate remained below the 70% mark for the seventh week running, recorded at 68.5%.
At the same time last year the weighted average clearance rate was slightly lower at 67.4%.
Last week RP Data was monitoring 3,360 auctions across the capital cities, which was 19%, higher than a year ago and 14% higher than the previous week. The largest auction markets continued to record the highest clearance rates.
Sydney’s auction market saw a success rate of 73.1% across 1,417 auctions, which was higher than the 68.1% clearance rate the previous week, and Melbourne recorded a clearance rate of 68.9% across 1,504 auctions, higher than the 65.5% auction clearance rate the previous week.
Capital city auction clearance rates
Week ending November 16, 2014
Weekly Advertised Listings
Over the four weeks to the 16th of November, there were 54,245 newly advertised properties added the national market; the highest number of new listings since late April in 2011.
New listing numbers are higher than at the same time a year ago (+3.3%) nationally, but across the capital cities vendors seem to be more confident, with the number of newly advertised properties up 5.4% compared with last year.
The largest rise in newly advertised stock numbers can be seen in Brisbane, where new listings are 12.2% higher than a year ago, and in Adelaide where new listing numbers are 7.7% higher.
There has been a reduction in new listing numbers compared with a year ago in Hobart (-7.5%) and Canberra (-17.0%).
Total advertised stock levels have been trending higher recently but eased slightly over the week. Nationally there are 254,644 homes being advertised for sale (-2.2% lower than a year ago) and across the capital cities there are 112,080 listings (-3.3% compared with last year).
Note that sales listings are based on a rolling 28 day count of unique properties that have been advertised for sale.
Number of homes for sale
Residential property listings advertised for sale over the four weeks ending 16/11/2014