The Reserve Bank (RBA) board met earlier this week and at their meeting decided to make no change to official interest rates. As a result, the cash rate remained on hold at 2.5%.
It was the seventh consecutive month where the cash rate held firm. The statement following decision noted that: “In the Board’s judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target.
On present indications, the most prudent course is likely to be a period of stability in interest rates.” From the statement we can gather that the RBA is intending to keep the cash rate on hold for the foreseeable future.
The Australian Bureau of Statistics (ABS) released dwelling approvals data for January 2014 earlier this week. The data showed the number of homes approved for construction rose by 6.8% over the month and were 34.6% higher year on year.
Over the month, there were a total of 17,514 dwelling approvals which was the greatest number of monthly approvals since October 2002. [sam id=41 codes=’true’]
On an annual basis, there were 182,243 dwelling approvals over the 12 months to January 2014 which was 17.5% higher over the year and the highest annual number of approvals since October 2010.
The data also highlighted the rising prominence of unit approvals which have accounted for a record high 44.2% of all approvals over the past 12 months.
The ABS also released the National Accounts data for the December 2013 quarter earlier this week. The data showed that Gross Domestic Product (GDP) increased by 0.8% over the quarter and was 2.7% higher throughout 2013.
This indicates that the Australian economy is continuing to grow, albeit at a below average rate. Over the year, the total value of the economic output of Australia was $1.55 trillion.
The National Accounts also showed that disposable incomes increased by just 1.8% over the year, once again this was well below the long-term average level of growth.
Finally the household savings ratio recorded quite a sharp drop over the quarter although it remains elevated. The ratio fell from 10.6% in September to 9.7% in December which is its lowest level since the June 2010 quarter.
This fall in household savings suggests that households are becoming less adverse to debt and are willing to increase spending as highlighted by retail and housing data.
Weekly Clearance Rates
There were 2,712 auctions held across the combined capital cities last week and the weighted average auction clearance rate was recorded at 74.2%.
In comparison, over the previous week, there were 2,905 capital city auctions with a clearance rate of 76.2%. Across Melbourne, Australia’s largest auction market, the auction clearance rate was recorded at 76.6% last week, up from 73.5% over the previous week.
The number of properties taken to auction was slightly lower, falling from 1,401 the previous week to 1,334 last week. There were 1,0.5 Sydney properties taken to auction last week, with a clearance rate of 77.6%, down from 84.2% the previous week when 1,101 auctions were held in the city. RP Data is expecting just over 1,402 auctions over the current week.
Over the four weeks to 2 March, there were 47,502 newly advertised properties listed for sale nationally. The number of newly advertised property listings increased by 4.1% over the week and they are currently 5.3% higher than at the same time last year.
Across the combined capital cities, new listings were 4.4% higher over the week and they were 7.8% higher than a year ago.
There are currently 247,972 properties listed for sale across the country. Total listings at a national level were 0.8% higher over the week but -2.4% lower than they were at the same time last year.
Across the combined capital cities, total listings have increased by 1.8% over the week and they are -8.8% lower than they were at this time a year ago. Capital city listings account for just 42% of all listings nationally.