Minutes of the Reserve Bank board meeting held earlier this month indicate
that the Bank has decided to keep the cash rate steady at 2.5%. This is the
tenth consecutive month where official interest rates have remained at a low
The Bank is comfortable with the pace of growth in the housing market,
highlighting that market conditions have eased compared with 2013. RBA is also
expecting an increase in household consumption, with retail spending continuing
to grow at the same strong pace as in the last quarter of 2013.
Indicating a more dovish tone, RBA has expressed their satisfaction with
the current cash rate setting over the foreseeable future. The Australian
dollar has moved slightly lower since the release of the Minutes, a positive
sign that currency markets aren't expecting a rate increase any time soon. The
ASX Cash Rate Futures indicator is projecting that the cash rate won’t move
higher until November 2015.
The Australian Bureau of Statistics released the latest population
statistics, which reveal Australia’s population increased by a further 0.4%, or
85,100 new residents over the December 2013 quarter, taking the annual rate of
population growth up 1.7% over the 2013 calendar year. Net overseas migration
accounted for 60% of total annual population growth, while natural increase
accounted for 40%. Western Australia recorded the fastest rate of population
growth for 2013, up 2.9 per cent, and New South Wales (1.5%) recorded its
fastest annual population growth since mid-2009. Tasmania recorded the slowest
rate of population growth (0.3%).
RP Data’s latest Pain and Gain update for the March quarter showed the
trend towards fewer loss making sales had levelled over the March quarter of
this year, with 9.8% of all residential re-sales recording a gross loss
compared with their original purchase price.
Auctions were up across Australia’s capital cities last week, with 2,108
auctions being held against the previous week’s total of only 1,191 auctions. Results
collected from 89% of all auctions show a weighted average clearance rate of 65.5%.
While Melbourne saw 1,016 auctions held with a strong clearance rate of 69.2%,
Sydney’s auction market saw 798 scheduled auctions with a clearance rate of
There were 39,841 newly advertised properties listed for sale nationally
over the four weeks to 15 June. New stock being added to the market is 8.3%
higher than at the same time last year. Overall, there are currently 246,573
properties listed for sale across the country with the total listings at the national
level 1.1% higher compared with the same time last year.