Industry Market Wrap
The RP Data-Rismark Home Value Index results for April 2012 were released this week and they showed that capital city home values fell by -0.8% over the month. On a quarterly basis, property values increased by 0.3% however, they fell by -4.5% over the 12 months. The decline in capital city home values over the year has been quite varied ranging from -0.7% in Canberra to -8.5% in Hobart.
The Reserve Bank (RBA) Board met to deliberate on interest rates this week. In a move that surprised most economists, the RBA decided to cut official interest rates by a much needed 50 basis points from 4.25% to 3.75%. At the time of writing, the National Australia Bank and the Commonwealth Bank of Australia had announced a 35 basis point and 40 basis point cut respectively to their standard variable mortgage rates. The cut in official interest rates will take the average standard variable mortgage rate to below average levels. The last paragraph in the RBA’s Statement was of particular interest: ‘In considering the appropriate size of adjustment to the cash rate at today's meeting, the Board judged it desirable that financial conditions now be easier than those which had prevailed in December. A reduction of 50 basis points in the cash rate was, in this instance, therefore judged to be necessary in order to deliver the appropriate level of borrowing rates.’ Clearly the RBA felt that a 25 basis point adjustment to the official cash rate would not result in a significant enough change to mortgage rates, as a result they cut by a larger 50 basis points to achieve their desired outcome.
Latest National Auction Clearance Rates
Auction clearance rates across the combined capital cities fell over the last week to 48.9% across 1,235 auctions. Over the previous week combined capital city auction clearance rates were recorded at 53.2% (one of the highest readings of the last nine months) across 1,159 auctions. In Australia’s largest auction market, Melbourne, clearance rates fell from 58.3% to 55.9%. Despite the fall in clearance rates, they have been recorded above 50% over 11 of the past 12 weeks. Sydney’s auction clearance rate was recorded at 49.9% last week, down from 54.0% over the previous week
Advertised Stock on the Market
The number of newly advertised properties for sale increased last week however, the number of new listings is lower than at the same time last year (-25.3% lower nationally and -16.1% lower across the combined capital cities). RP Data is currently tracking 305,782 properties for sale nationally and 145,743 properties across the capital cities. The total number of properties advertised for sale is 13.8% higher than at the same time last year nationally and 12.3% higher across the combined capital cities. Across individual capital cities, the total number of properties advertised for sale is lower than at the same time last year in Perth (-9.0%) and Darwin (-17.0%). Total listings are 12.1% higher than at the same time last year in Sydney, 31.6% higher in Melbourne. 5.4% higher in Brisbane and 14.9% higher in Adelaide.
Number of Properties Advertised for Rent
The number of newly advertised properties for rent increased over the past week across both the national and capital city markets. The number of new properties listed for rent is 19.0% higher than at the same time last year nationally and 22.4% higher across the combined capital cities. RP Data is currently tracking a total of 79,047 properties advertised for rent across the nation and 52,736 properties across the combined capital cities. Nationally, the total number of properties listed for rent rose last week as well as across the capital cities. Despite the increase, total rental listings are now -13.6% lower than at the same time last year nationally and -10.4% lower across the capital cities.
