The Reserve Bank (RBA) released the minutes of their August board meeting earlier this week. At the meeting the RBA’s board decided to keep official interest rates on hold at 2.5%.
Regarding the housing market, the minutes noted:
“Members observed that residential dwelling approvals had declined somewhat in recent months, but remained at a high level and, in combination with the substantial amount of residential work yet to be done, suggested that dwelling investment was likely to remain strong in the period ahead.
Conditions in the established housing market also remained strong and while house price inflation across the country in 2014 had not been as rapid as over the second half of 2013, it had remained robust.
Auction clearance rates in Sydney had eased from their high levels in late 2013, although they had increased in Melbourne more recently.
Factors influencing the demand for and supply of housing at present were also noted.”
The minutes once again re-iterated that monetary policy is appropriate and that the most prudent course of action was a period of interest rate stability.
Glenn Stevens (The RBA Governor) also appeared in front of the House of Representatives Standing Committee on Economics earlier this week.
There wasn’t much housing related commentary in his opening address however, he did note that net worth per household has risen by about $120,000 over the past year.
This is of course partly by virtue of home value growth however, it should be noted households in Sydney and Melbourne have recorded substantially larger gains than those elsewhere where values have risen by 22.2% and 15.7% respectively over the past two years.
The ANZ-Roy Morgan Australian Consumer Confidence Index release for this week showed that confidence increased by 3.7% to 112.5 points. The rise was following a 5.7% fall in the index over the previous week.
The index is showing higher levels of optimism than pessimism currently and the index sits just slightly lower than its long-run average.
Weekly Clearance Rates
Auction clearance rates rose to their highest levels in 24 weeks last week with the capital city weighted average clearance rate recorded at 70.8%, compared to 68.0% over the previous week.
There were 1,594 auctions held over the week compared with 1,470 over the same week a year prior, auction numbers were also up from 1,555 the previous week. RP Data collected 87% of all auction records.
The major auction markets of Sydney and Melbourne continued to record healthy auction results. Sydney’s clearance rate was 76.2% across 500 reported auctions, which was slightly higher than the clearance rate of 74.7% the previous week.
Melbourne’s auction market recorded a clearance rate of 73.3% across 658 collected auction results. The clearance rate in Melbourne last week was up from 69.6% the previous week and at its highest level in 24 weeks.
Weekly Advertised Listings
Over the four weeks to 17 August, there were 33,611 newly advertised properties listed for sale nationally (excluding WA). New listing numbers have continued to trend higher in the lead up to the start of Spring.
Nationally (exc. WA), new listings have moved to be -2.1% lower than a year ago, while across the combined capital cities new stock being added to the market is now 0.5% higher than at the same time last year.
There are currently 203,498 properties listed for sale across the country (excluding WA). Total listings at a national level were -7.5% lower compared with the same time last year.
Across the combined capital cities, total listings remain -13.1% lower than a year ago, highlighting that total stock levels have reduced over the year.
Note that sales listings are based on a rolling monthly count of unique properties that have been advertised for sale.
*We are currently experiencing some issues with the sourcing of our WA listings data. Our data team is looking into this as a matter of priority however, we have moved WA results from this week’s results and will re-issue when they are revised.
Number of homes for sale*
Residential property listings advertised for sale over the four weeks ending 17/08/2014