Earlier this week the Reserve Bank (RBA) released the minutes of their April board meeting.
At the meeting the RBA decided to keep official interest rates on hold at 2% for the 11th consecutive month.
The minutes noted the following key points:
- GDP had increased by 3% in 2015 which was stronger than forecast and recent data indicates moderate economic growth early in 2016
- Household consumption had picked up over the second half of 2015 due to low interest rates and strong employment growth despite the ongoing
subdued growth in household incomes.
- Dwelling investment rose sharply over the final quarter of 2015 although approvals have fallen over the past year however, the large pipeline of work yet to be done is likely to support dwelling investment in the period ahead.
- Value growth in the housing market has continued to ease with the slowing in unit value growth consistent with the surge in new unit supply while overall growth conditions across the capital cities remains varied.
- Growth in housing credit has slowed over recent months after trending higher through to the middle of last year.
- The decline in business investment over the final quarter of 2015 was as expected. After peaking at around 8% of nominal GDP, mining investment
has fallen to around 4%. Although commodity prices have recently rallied it was unlikely to cause a significant change in mining investment over the
- Employment growth in non-mining sectors of the economy had been relatively strong and that there was evidence that non-mining business investment
had increased over the previous financial year in NSW and Vic.
- Employment levels have changed very little over recent months however, the unemployment rate in February had fallen to 5.8%. It was commented
that ‘overall the labour market was noticeably stronger than a year earlier.’
- The RBA also noted the rise in the Australian dollar, which recently reached US$0.78, could ‘complicate progress in activity rebalancing towards thenon-mining sectors of the economy’.
Another important comment within the minutes was the change in language about monetary policy.
Monetary policy had previously been described as accommodative however, in this month’s minutes they were described as very accommodative.
Given these factors, the Board decided to keep official interest rates on hold noting that continued low inflation provides the board with scope to ease monetary policy further, if the Board feels that it is necessary.
Over the week ending April 17 there were 1,699 capital city auctions with CoreLogic collecting results for 1,563 auctions, accounting for 92% of all auctions held.
The final clearance rate was recorded at 67.4% which is up slightly from the previous week when it was recorded at 67.1%.
The number of auctions fell from 1,831 over the previous week.
Last week, across Melbourne, typically the largest capital city auction market, 889 auctions were held with a clearance rate of 71.5%.
Melbourne’s clearance rate had fallen from 73.2% over the previous week and clearance rates in Melbourne have now not been above 75% for 10 weeks.
Sydney’s auction clearance rate was recorded at 69.8% across 477 auctions compared to a clearance rate of 67.1% across 678 auctions the previous week.
Sydney’s auction clearance rate has now been below 70% for each of the past three weeks.
Across the remaining regions, Canberra was the only city in which clearance rates increased over the week.
Note that sales listings are based on a rolling 28 day count of unique properties that have been advertised for sale.
Relative to the same period last year, the number of new listings over the past twenty eight days is -3.6% lower on a national basis and the total volume of stock on the market is also -3.6% lower.
Across the combined capital cities, new listings are -2.4% lower relative to last year, while total listings are 2.5% higher.
On a city by city basis, only Melbourne (+3.1%), Adelaide (+5.8%), Hobart (+1.3%) and Canberra (+7.7%) are seeing a higher number of new listings than a year ago suggesting vendors remain more confident in these markets.
In terms of the total stock available for sale, Melbourne (-3.2%), Brisbane (-1.2%), Hobart (-26.2%) and Canberra (-11.2%) have fewer total properties for sale than a year ago.
Nationally, new listings are at their lowest level in 12 weeks while total listings have fallen over the week.
Across the capital cities, new listings are at their lowest level in 12 weeks while total listings have fallen over the week.