The Reserve Bank (RBA) released the minutes of their October monetary policy meeting earlier this week.
At the meeting the RBA board decided to keep official interest rates on hold at 1.5%.
The major points of note from the minutes were:
• GDP growth moderated in the June 2016 quarter however, it was higher than forecast a year earlier and moderate growth is expected again for the September 2016 quarter.
• Household consumption growth slowed over the June quarter due to lower growth in retail sales volumes.
• Dwelling investment has increased more rapidly than housing credit pointing to growth in housing equity at a relatively strong rate.
• The large amount of dwelling construction in the pipeline remains at a high level which is expected to continue to support dwelling investment for some time although the rate of growth is expected to decline.
• Conditions had eased relative to a year ago in the established housing market however, there had been some signs that conditions had strengthened a little more recently.
• Housing price growth in Sydney and Melbourne had increased in recent months and auction clearance rates in these two cities had risen.
• Conditions in the rental market had continued to soften.
• It was noted that a considerable supply of apartments was scheduled to come on stream over the next few years, particularly in the eastern capital cities.
• Members noted that while the risks associated with rapid growth in housing prices and lending had eased over the past year they still need to be monitored closely.
In their final comments the RBA board noted: ‘… data on CPI inflation for the September quarter and an update of the forecasts would be available at the next meeting.
This would provide an opportunity to consider the economic outlook, assess the effects of previous reductions in the cash rate and review conditions in the labour and housing markets.’
Across the combined capital cities there were 2,443 auctions which was the highest weekly number since late May 2016.
CoreLogic collected results for 92% of these auctions.
Across the capital cities the auction clearance rate was recorded at 76.2% which was virtually unchanged from the 76.4% across 2,290 auctions the previous week.
In Melbourne, there were 1,182 auctions last week with a clearance rate of 77.7%.
Auction volumes rose from 1,114 the previous week while the clearance rate was lower than the 78.4% recorded.
In Sydney, auction clearance rates bounced last week back above 80% from 79.8% to 81.4% this week.
Auction volumes were also higher last week, increasing from 816 to 913.
Auction clearance rates in both Sydney and Melbourne have been above 75% throughout all of Spring.
Canberra which also sees a relatively high proportion of properties sold at auction has recorded consecutive weeks of clearance rates above 80%.
Note that sales listings are based on a rolling 28 day count of unique properties that have been advertised for sale.
There were 46,815 newly advertised properties added to the market nationally over the past 28 days which was -1.1% lower than at the same time a year ago while there were 236,072 total properties advertised for sale over the same period which was -1.1% lower than a year ago.
Both new and total listings are rising however, they both remain lower than levels a year ago.
Across the combined capital cities, there were 28,846 newly advertised listings over the past 28 days which was -3.6% lower than a year ago and 106,895 total listings which was 4.6% higher than a year ago.
Newly advertised listings are currently lower than a year ago in Sydney (-16.2%), Melbourne (-4.2%), Adelaide (-3.5%), Darwin (-19.6%) and Canberra (-4.6%) with new listings higher elsewhere.
In terms of total properties advertised for sale, stock levels are lower than a year ago in Sydney (-5.8%), Hobart (-30.7%) and Canberra (-19.2%).
The two strongest housing markets over recent times, Sydney and Melbourne, continue to see significantly fewer new properties becoming available for sale which is supporting demand and maintaining the strength in the auction market.
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