The week that was in property

The Reserve Bank (RBA) held their monthly board meeting earlier this week where they decided to keep official interest rates on hold at 2%.

When the RBA cut interest rates last month to 2% many analysts noted that they removed their forward guidance.

It noted:

‘Having eased monetary policy last month, the Board today judged that leaving the cash rate unchanged was appropriate at this meeting.

Information on economic and financial conditions to be received over the period ahead will inform the Board’s assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.’

While that doesn’t clearly state a bias it does indicate that their decisions will be led by upcoming data on when and how to adjust monetary policy prices

Interestingly, the cash rate futures market is now pricing in an additional 25 basis point cut to interest rates early next year which would see interest rates fall to 1.75%.

One of those data sets is the national accounts information for the March quarter, which was released on Wednesday this week by the Australian Bureau of Statistics (ABS).

The data showed that Gross Domestic Product (GDP) increased by 0.9% over the quarter (compared with a 0.5% rise over the previous December quarter) to be 2.3% higher over the year.

Looking at GDP on a per capita basis, it increased by 0.6% over the quarter however, it is only 0.8% over the year.

With net overseas migration trending lower it is reasonable to expect that GDP per capita will remain well below the headline figure.

The national accounts data also showed that over the March 2015 quarter, the household savings ratio was recorded at 8.3%.

Household savings has now been below 10% for 7 quarters and the 8.3% read over the month was the lowest since September 2008.

National disposable incomes reportedly fell by -0.2% over the past 12 months.

This represented the largest annual fall in disposable incomes since the 12 months to March 2010.

zzz auc rates

CoreLogic RP Data was tracking 2,792 auctions over the past week, which was an increase on the 2,599 auctions the previous week.

The weighted average clearance rate across the capital cities was 78.5%; the 12th consecutive week where the combined capitals clearance rate has been above 75%.

The largest auction market, Melbourne, saw 1,248 auctions held last week with a clearance rate of 80.2%.

There were a greater number of auctions than the 1,162 the previous week however, the clearance rate fell from 80.2% over the previous week.

In Sydney there were 1,149 auctions with a clearance rate of 85.0% last week.

Auction volumes increased over the week while the clearance rate fell from 86.2%.

Sydney auction clearance rates have now been above 80% each week since the Reserve Bank cut official interest rates by 25 basis points at the start of February 2015.

zzzhomes for sale

The number of new homes being advertised for sale has fallen over the past week and so too have total listings which have fallen for the fourth successive week.

Total listings nationally are -4.8% lower than the number from a year ago while capital city listings are -7.5% lower.

Over the past four weeks there have been 42,030 newly advertised properties added to the market which is -5.3% fewer than at the same time one year ago.

A similar trend can be seen across the capital cities where 25,765 new listings hit the market over the past four weeks which is -6.8% lower than at the same time last year.

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

Meanwhile, although capital city stock is lower than a year ago, it is being fuelled by a significant decline in listings compared to a year ago in Sydney (-24.6%) and to a lesser degree Canberra (-19.6%), Hobart (-11.3%) and Melbourne (-10.0%).

Note that the total number of properties listed for sale in Sydney (16,662) remains lower than each of: Melbourne (29,014), Brisbane (18,332) and Perth (19,479).



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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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