RPData‘s latest market wrap is out and the news is much the same as last week. Auction clearance rates hovering around the 50% mark, stock on market continuing to climb, while the rental market treads water:
The Reserve Bank’s (RBA) board met on Tuesday and decided to keep official interest rates on hold at 4.25%. Their media statement highlighted an expectation that the world economy is likely to grow at below trend pace however, the RBA don’t foresee a deep downturn. Regarding Australia, the RBA sees the Australian Economy continuing to grow at close to trend rates (more on this later) and they expect inflation will remain between their 2% to 3% target band.
The Bank stated that mortgage rates had risen slightly since the last meeting (with the banks moving variable mortgage rates independently of the RBA) however, bank lending rates remain at around average levels. The RBA also noted that although the housing market remains soft there had been some stabilisation in conditions towards the end of last year. Given the expectation that the economy would grow at close to trend and that inflation is forecast to remain in check, the RBA board felt there was no need to adjust monetary policy however, they did note that if conditions weakened there would be scope to provide further interest rate cuts.
The day after the cash rate announcement the National Accounts results for the December 2011 quarter were released by the Australian Bureau of Statistics (ABS). The Gross Domestic Product (GDP) data for December 2011 showed that the economy is in fact growing well below trend levels. Over the quarter, GDP rose by 0.4% and over the year it was up 2.3%. Over the last 20 years, the average annual rate of economic growth has been recorded at 3.4% which indicates that the current pace of GDP growth is well below trend (and hasn’t been above trend since the December 2007 quarter). The household savings ratio eased over the quarter to 9.0% on the back of improved consumer confidence, however households continue to save at much higher levels than they have done so over the past 24 years. Disposable income growth has also slowed, rising by 4.9% over the 2011 calendar year.
Auctions
Across the combined capital cities auction clearance rates remained above 50% (50.2%) for the second consecutive week. It was the first time successive weeks had a clearance rate above 50% since April 2011. Despite the result, auction clearance rates dipped from 53.9% the previous week. Australia’s largest auction market, Melbourne, recorded a clearance rate of 55.0%, down from 60.6% the previous week. Sydney clearance rates also eased, down to 50.4% from 52.6% the previous week. All other capital cities recorded a clearance rate below 50% over the week.
Stock on Market
The number of newly advertised properties for sale increased again last week, the seventh consecutive week they have done so. Although new listings continue to climb to higher levels, the number of homes being added to the market remain at lower levels than the same period last year (-9.3% lower nationally and -15.8% lower in capital cities). RP Data is currently tracking 311,389 properties for sale across the country and 149,143 properties across the capital cities. Throughout Australia, total listings are currently 24.9% higher than they were at the same time last year and 19.3% higher across the capital cities. The total number of properties available for sale has continued to increase over the past week and are now just -4.3% below their November 2011 peak nationally and -8.0% lower across the combined capital cities. The elevated number of properties available for sale will continue to act as a barrier to capital growth.
Properties advertised for Rent
The number of newly advertised properties for rent fell over the past week across both the national and capital city markets. Despite the fall, the number of new properties listed for rent is 24.9% higher than at the same time last year nationally and 21.7% higher across the combined capital cities. RP Data is currently tracking a total of 96,446 properties advertised for rent across the nation and 63,728 properties across the combined capital cities. The total number of properties listed for rent fell last week nationally and across the capital cities however, they are 8.5% higher than at the same time last year nationally and 8.0% higher across the combined capital cities.
That report however, hasn’t dampened a rather upbeat and far more funky RPData March 2012 update, available below. It’s a 10 minute presentation, so if you are impatient then Sydney is at 3:35, Melbourne 4:15, Brisbane 4:43, Adelaide 5:15, Perth 5:40, Hobart: 6:10, Darwin: 6:38, Canberra: 6:59
