At the end of last week, the Reserve Bank (RBA) released private sector credit data for June 2016.
The data showed that over the 12 months to June 2016, housing credit increased by 6.7% which was its slowest annual growth rate since August 2014.
In terms of the components of housing credit, owner occupier credit advanced by 7.7% over the year while investor credit increased
The 5.0% increase in investor credit is its lowest annual rise since February 2012 which is before the current home value growth phase commenced.
Investor credit is now well below the 10% speed limit however, the data points to the fact that despite many lenders having scope to increase investment lending demand, at this stage, is not strong enough to reinflate growth.
The RBA also held their monthly board meeting this week, at which they decided to cut official interest rates by 25 basis points to 1.5%.
At the time of writing, Commonwealth Bank was the only major bank to announce their changes with standard variable mortgage rates to fall 0.13% while deposit rates will actually increase.
An important part of the RBA’s Statement was that they felt that lower interest rates were less likely to exacerbate risks in the housing market.
We shall see over the coming months whether this is the case.
The Australian Bureau of Statistics (ABS) released building approvals data for June 2016 earlier this week.
The data showed that over the month there were 9,514 houses and 9,179 units approved for construction.
House approvals fell by -2.4% over the month and were -5.5% lower year-on-year.
House approvals were -3.4% lower over the month and down -6.3% year-on-year.
Despite the decline in approvals over recent months they remain well above long-term average levels indicating that there remains a significant pipeline of housing to be constructed nationally.
The heightened volume of unit approvals with their longer construction time means the benefits of heightened construction will persist for some time yet.
Over the week ending July 31 there were 1,610 capital city auctions with CoreLogic collecting results for 1,452 auctions, accounting for more than 90% of all auctions held.
The final clearance rate was recorded at 72.0%, which is the highest clearance rate of the year and the highest since September last year.
Last week, across Melbourne, 754 auctions were held with a clearance rate of 75.3%, up from 71.6% across 572 auctions over the previous week.
Sydney’s auction clearance rate was recorded at 78.0% across 509 auctions with the clearance rate up from 71.5% across 473 auctions over the previous week.
Sydney’s auction clearance rate has been above 70% for 15 consecutive weeks while last week was the fourth consecutive week clearance rates have been above 70% in Melbourne.
Across the remaining capital cities, clearance rates increased across all cities except Brisbane and Hobart.
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 -10.9% lower on a national basis and the total volume of stock on the market is -1.2% lower.
Across the combined capital cities, new listings are -13.9% lower relative to last year, while total listings are 4.5% higher.
On a city-by-city basis, Perth (+4.7%) and Hobart (+11.8%) are the only capital cities where new listings are now higher than they were a year ago.
In terms of the total stock available for sale, Melbourne (-0.5%), Hobart (-33.2%) and Canberra (-13.0%) are the only capital cities to have fewer total properties for sale than a year ago.
Over the past few weeks new listings have shifted a little higher however, the data continues to suggest that very little new supply is entering the market however, a proportion of currently listed stock is proving difficult to sell resulting in higher total listings across the capital cities relative to a year ago.
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