Rates on hold as Aussie dollar down
The Reserve Bank decision to keep interest rates on hold today will have little impact on a strengthening housing market, according to LJ Hooker, Australia’s most trusted real estate network.
Weekend auction clearance rates in Sydney (77.4%), Melbourne (73%), Brisbane (61%) and Adelaide (72%) indicated competition amongst buyers was fuelling a market recovery, Deputy Chair
L Janusz Hooker said.
Mr Hooker said a shortage of new property listings ahead of the election, combined with already low-interest rates, would continue to underpin the housing market.
He said a weaker Australian dollar gave little incentive for a rate cut this month but means it is more likely to occur in August to sustain property and encourage investment in the non-mining sector.
``Whether they change it now or next month is not going to make a big difference in the overall housing cycle so they are waiting for more data instead of moving prematurely,’’ Mr Hooker says.
``I think they will wait until the latest quarterly inflation figures are released later this month and also the performance of the Australian dollar.’’
``Australian residential property is clearly in recovery in many metropolitan areas such as Sydney and Perth but further cuts will be needed to offset the peak in mining investment.’’
It has been a busy start to the winter selling period across the country.
Agents in some Sydney suburbs are reporting properties selling, sometimes within hours, of being listed because of a shortage of stock and competition pushing up prices.
While consumer confidence about property is high, agents are having to work extra hard to secure listings in the traditionally quieter winter selling period.
Mr Hooker said uncertainty about the upcoming Federal election will be making some buyers jittery but traditionally the market strengthens after polling day.
``It is an interesting phenomenon because people are very positive about the market and there is strong buyer enquiry, but there are just not enough listings,’’ he says.