RBA holds tight in first meeting of 2017
Prices in Australia’s under-supplied city housing markets have escaped further stimulus with the Reserve Bank of Australia keeping the official cash rate on hold in their first monthly meeting of 2017.
Capital city home values rose 0.7% in January – typically one of the quieter calendar months – to again account for double digit (10.7%) growth over 12 months.
LJ Hooker’s National Head of Research Mathew Tiller said combining a rate cut with a significant undersupply of housing in the majority of Australia’s capital cities would have further propelled market prices into autumn.
“New listings are down 20% nationally compared to the same time last year and total listings are down 11% over the same period,” said Mr Tiller.
“This shortage of listings is still fanning the heated Sydney and Melbourne markets, where home prices rose 2.7% and 2.4% respectively over the past quarter, according to recent CoreLogic data. Even in Perth, where there has been an over-supply of property during the last two years, buyers and investors have realised there’s opportunity to be gained, with home values rising 2.1% over the period (CoreLogic).
“New year inflation, jobs data and the fluctuating Australian Dollar’s position were mixed, failing to provide a compelling reason for the RBA Board to proactively adjust their monetary policy. This offers a moderate level of relief for buyers.”
Mr Tiller said while popular opinion believed the RBA was unlikely to move the cash rate in 2017, home buyers and investors should factor in independent moves by major lenders.
“We saw many lenders make their own strategic movements in the latter part of 2016 and that will likely occur again this year,” said Mr Tiller.