The Reserve Bank (RBA) released their biannual Financial Stability Review (FSR) earlier this week.
The FSR is released each six months and provides an overview of the Australian Financial System.
There was some very big news from a housing market perspective in this issue. The FSR noted that: ‘the composition of housing and mortgage markets is becoming unbalanced, with new lending to investors being out of proportion to rental housing’s share of the housing stock.’
The RBA also states, ‘The Bank is discussing with APRA, and other members of the Council of Financial Regulators, additional steps that might be taken to reinforce sound lending practices, particularly for lending to investors.’
This seemingly indicates that the RBA along with APRA are seriously considering the implementation of macroprudential policies which place limits on higher risk lending.
If the New Zealand experience is anything to go by (where the RBNZ applied LVR limits on the lending sector), the introduction of macroprudential ‘speed humps’ are likely to have the effect of slowing housing market conditions and speculative demand, however the New Zealand policies were also accompanied by rising interest rates which arguably had a more substantial effect on the market slowdown.
You can read a lot more about the contents of the FSR at the RP Data Research Blog where we have undertaken a detailed analysis of the document from a housing market perspective.
The ANZ-Roy Morgan Australian Consumer Confidence Index rose by 1.4% this week. Following the 1.4% increase, the index largely retraced the previous week’s modest fall.
According to ANZ, the index has now been broadly steady for six consecutive weeks consistently around its long-term average.
The rise in the index was driven by relatively large rises in expectations for economic conditions over the next five years and financial situation over the next year.
Time to buy a major household item was the only sub-index to fall over the week.
Weekly Clearance Rates
Auction clearance rates moved slightly lower over the week, with the capital city weighted average clearance rate recorded at 70.8%, down from 72.3% the previous week.
There were 2,530 auctions held over the week compared with 2,109 over the same week a year prior. Auction numbers were higher than the 2,080 recorded over 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 78.0% across 883 reported auctions, which was down from 78.4% across 743 reported auctions the previous week.
Melbourne’s auction market recorded a clearance rate of 72.1% across 1,221 collected auction results. The clearance rate in Melbourne last week was down from 73.4% across 1,018 collected auctions the previous week
Capital city auction clearance rates
Week ending September 21, 2014
Weekly Advertised Listings
Over the four weeks to 21 September, there were 37,123 newly advertised properties listed for sale nationally (excluding WA).
New listing numbers are slowly trending higher as we enter Spring. Nationally (exc. WA), new listings are -1.2% lower than a year ago, while across the combined capital cities new stock being added to the market is 0.6% higher than at the same time last year.
There are currently 207,371 properties listed for sale across the country (excluding WA). Total listings at a national level were -6.5% lower compared with the same time last year.
Across the combined capital cities, total listings are -11.6% 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 21/09/2014