The week that was in property

The Reserve Bank (RBA) held their monthly board meeting earlier this week.

At the meeting the RBA board decided to keep official interest rates on hold at 2.25%, which came as a surprise to some.

While the cash rate was kept on hold for a second successive month, markets are still anticipating a further 50 basis points worth of cuts over the coming months.

In the statement following the decision, the following was noted about the housing market:

Growth in lending to investors in housing assets is stronger than to owner-occupiers, though neither appears to be picking up further at present. Lending to businesses, on the other hand, has been strengthening recently.

Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities.

The Bank is working with other regulators to assess and contain risks that may arise from the housing market.’

This comment clearly signals (again) that the RBA is concerned about the rate of home value appreciation in Sydney and the heightened level of lending to investors.

In the final part of the statement the RBA has left the door open for further easing of interest rates as highlighted by the following. ‘At today’s meeting the Board judged that it was appropriate to hold interest rates steady for the time being.

Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target. The Board will continue to assess the case for such action at forthcoming meetings.’

Earlier this week the Australian Bureau of Statistics (ABS) released retail trade data for February 2015.

Over the month, retail trade increased by 0.7% to be 1.3% higher over the quarter and 4.3% higher year-on-year.

If you look across the state’s, New South Wales (which also has the strongest housing market) has recorded the greatest increase in retail trade over the year (5.6%).

The impact of the housing market is further evident when you look at the growth in retail trade by industry.

The annual increase in trade by industry has been strongest for household goods (9.3%), cafes, restaurants and take-away (5.2%) and food retailing (4.1%).

On the other hand, increases have been much more moderate for ‘other retailing’ (1.4%) and clothing, footwear and personal accessories (2.4%) while department store retailing is actually -0.7% lower over the year.

auc clear 1

CoreLogic RP Data was tracking 653 auctions over the past week, which was a significant reduction on the 3,668 auctions the previous week due to the Easter long weekend.

The weighted average clearance rate across the capital cities was 78.9%; the fourth consecutive week where the combined capitals clearance rate has been above 75% and the highest clearance rate since September 2009.

The largest auction market, Melbourne, saw just 63 auctions held last week with a clearance rate of 86.5%, up from 78.8% over the previous week.

In Sydney there were 427 auctions with a clearance rate of 84.7% which was slightly higher than the 84.4% the previous week.

Sydney auction clearance rates have been above 80% for 9 successive weeks since the Reserve Bank cut official interest rates by 25 basis points at the start of February 2014.

auc clear 2

The number of homes being advertised for sale has moved lower over the past week and so too has the number of new properties advertised for sale, down for the fifth consecutive week.

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Total listings nationally are -2.1% lower than the number from a year ago while capital city listings are -5.3% lower.

Over the past four weeks there have been 42,317 newly advertised properties added to the market which is -13.7% fewer than at the same time one year ago.

A similar trend can be seen across the capital cities where 24,746 new listings hit the market over the past four weeks which is -18.5% lower than at the same time last year.

The number of new listings is lower currently compared to the same time in 2014 across every capital city.

Meanwhile, only Perth (+15.4%), Darwin (+34.9%) and Canberra (+14.9%) have more total stock for sale now than they did a year ago.

Note that the total number of properties listed for sale in Sydney (18,363) is now lower than each of: Melbourne (29,779), Brisbane (19,027) and Perth (20,352).


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Tim heads up the Core Logic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia. Visit

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