Wednesday, September 21, 2016

ABS - Perth is back to 2013 house prices

If you bought a house before 2013, chances are that your house has not appreciated any more in the last three years according to the Australian Bureau of Statistics. Over the past year, house prices in Perth have fallen by 4.8% while the national trend in the last three months has been to increase by 2%. It is the largest annual rate of decline in Perth since mid-2011 and prices now are at the same level as in 2013. 2014 saw Perth prices peak but house prices have dropped by almost 6% since then. In the last five years, the RBA cash rate has dropped from 4.75% to 1.5% today. So while interest rates have never been so good, house prices seem stagnant, to falling.

Tuesday, August 2, 2016

Australian Cash Rate Now 1.50%

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.50 per cent, effective 3 August 2016.
The global economy is continuing to grow, at a lower than average pace. Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies. Actions by Chinese policymakers are supporting the near-term growth outlook, but the underlying pace of China's growth appears to be moderating.
Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years. Australia's terms of trade remain much lower than they had been in recent years.
Financial markets have continued to function effectively. Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.
In Australia, recent data suggest that overall growth is continuing at a moderate pace, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend. Labour market indicators continue to be somewhat mixed, but are consistent with a modest pace of expansion in employment in the near term. 
Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.
Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.
Supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. The most recent information suggests that dwelling prices have been rising only moderately over the course of this year, with considerable supply of apartments scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in lending for housing purposes has slowed a little this year. All this suggests that the likelihood of lower interest rates exacerbating risks in the housing market has diminished. 
Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.

Friday, July 1, 2016

Perth 7.4% House Price Decline in 18 months

If you have been listening to the real estate agents, you would be thinking that the house prices are about to go back up again. Unfortunately, the last 18 month has seen a 7.4% drop in house prices in Perth. We are the worst performing market in Australia.

Over six months, house prices have dropped 4.7%, and 7.4% in the last 12 months. The closest market to Perth is Darwin but they have only dropped 1.1%. How's the east coast doing? Sydney is up 11.3% and Melbourne is up 11.5% over the last year. The vacancy rate is sitting at 4.7%, also the worst in the country.

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