Tuesday, December 3, 2019

RBA aren't going any lower

Having recently stated that they have no real desire to go into negative interest territory, the RBA today announced the anticipated hold on interest rates. Here is their statement below.

At its meeting today, the Board decided to leave the cash rate unchanged at 0.75 per cent.
The outlook for the global economy remains reasonable. While the risks are still tilted to the downside, some of these risks have lessened recently. The US–China trade and technology disputes continue to affect international trade flows and investment as businesses scale back spending plans because of the uncertainty. At the same time, in most advanced economies unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken steps to support the economy while continuing to address risks in the financial system.
Interest rates are very low around the world and a number of central banks have eased monetary policy over recent months in response to the downside risks and subdued inflation. Expectations of further monetary easing have generally been scaled back. Financial market sentiment has continued to improve and long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are at historically low levels. The Australian dollar is at the lower end of its range over recent times.
After a soft patch in the second half of last year, the Australian economy appears to have reached a gentle turning point. The central scenario is for growth to pick up gradually to around 3 per cent in 2021. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, the upswing in housing prices and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending. Other sources of uncertainty include the effects of the drought and the evolution of the housing construction cycle.
The unemployment rate has been steady at around 5¼ per cent over recent months. It is expected to remain around this level for some time, before gradually declining to a little below 5 per cent in 2021. Wages growth is subdued and is expected to remain at around its current rate for some time yet. A further gradual lift in wages growth would be a welcome development and is needed for inflation to be sustainably within the 2–3 per cent target range. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.
Inflation is expected to pick up, but to do so only gradually. In both headline and underlying terms, inflation is expected to be close to 2 per cent in 2020 and 2021.
There are further signs of a turnaround in established housing markets. This is especially so in Sydney and Melbourne, but prices in some other markets have also increased recently. In contrast, new dwelling activity is still declining and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.
The easing of monetary policy this year is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. The lower cash rate has put downward pressure on the exchange rate, which is supporting activity across a range of industries. It has also boosted asset prices, which in time should lead to increased spending, including on residential construction. Lower mortgage rates are also boosting aggregate household disposable income, which, in time, will boost household spending.
Given these effects of lower interest rates and the long and variable lags in the transmission of monetary policy, the Board decided to hold the cash rate steady at this meeting while it continues to monitor developments, including in the labour market. The Board also agreed that due to both global and domestic factors, it was reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Monday, October 28, 2019

Perth Housing Recovery only in 2021 - Corelogic

Is this the best time to buy? The latest analysis released today points to a further drop in the Perth housing market in the coming year. Corelogic released numbers today that predict at 0.7% decline in house prices in 2020 for Perth. This was a 1% drop in their prediction earlier but they expect a 3.1% improvement in 2021.

Tuesday, October 1, 2019

Australia's Official Interest Rates - 0.75%

The RBA has delivered the third reduction in the cash rate since June 2019, lowering the cash rate to 0.75%. Here is their official statement:

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 0.75 per cent.

While the outlook for the global economy remains reasonable, the risks are tilted to the downside. The US–China trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans because of the increased uncertainty. At the same time, in most advanced economies, unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken further steps to support the economy, while continuing to address risks in the financial system.

Interest rates are very low around the world and further monetary easing is widely expected, as central banks respond to the persistent downside risks to the global economy and subdued inflation. Long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at its lowest level of recent times.

The Australian economy expanded by 1.4 per cent over the year to the June quarter, which was a weaker-than-expected outcome. A gentle turning point, however, appears to have been reached with economic growth a little higher over the first half of this year than over the second half of 2018. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending.

Employment has continued to grow strongly and labour force participation is at a record high. The unemployment rate has, however, remained steady at around 5¼ per cent over recent months. Forward-looking indicators of labour demand indicate that employment growth is likely to slow from its recent fast rate. Wages growth remains subdued and there is little upward pressure at present, with increased labour demand being met by more supply. Caps on wages growth are also affecting public-sector pay outcomes across the country. A further gradual lift in wages growth would be a welcome development. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation pressures remain subdued and this is likely to be the case for some time yet. In both headline and underlying terms, inflation is expected to be a little under 2 per cent over 2020 and a little above 2 per cent over 2021.

There are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne. In contrast, new dwelling activity has weakened and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

The Board took the decision to lower interest rates further today to support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target. The economy still has spare capacity and lower interest rates will help make inroads into that. The Board also took account of the forces leading to the trend to lower interest rates globally and the effects this trend is having on the Australian economy and inflation outcomes.

It is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Perth house prices continue slide

There has been some improvement in the real estate market in the eastern states but Perth continues the downward slide. Perth prices dropped 0.8% last month, contributing to the 5.9% drop for the last 12 months and a furthering the 20.6% slide since 2014.

Across Australia, house prices on average went up 0.9% with much of that coming from both Sydney and Melbourne who both increased value by 1.7% last month as a result of the drop in interest rates. This could continue with the RBA expected to decrease interest rates again.


Tuesday, September 3, 2019

Reserve Bank holds interest rates at 1%

The RBA held the interest rate for the second time after two consecutive cuts in June and July. Here's their explanation

At its meeting today, the Board decided to leave the cash rate unchanged at 1.00 per cent.
The outlook for the global economy remains reasonable, although the risks are tilted to the downside. The trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans due to the increased uncertainty. At the same time, in most advanced economies, unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken further steps to support the economy, while continuing to address risks in the financial system.
Global financial conditions remain accommodative. The persistent downside risks to the global economy combined with subdued inflation have led a number of central banks to reduce interest rates this year and further monetary easing is widely expected. Long-term government bond yields have declined and are at record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at its lowest level of recent times.
Economic growth in Australia over the first half of this year has been lower than earlier expected, with household consumption weighed down by a protracted period of low income growth and declining housing prices and turnover. Looking forward, growth in Australia is expected to strengthen gradually to be around trend over the next couple of years. The outlook is being supported by the low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets and a brighter outlook for the resources sector. The main domestic uncertainty continues to be the outlook for consumption, although a pick-up in growth in household disposable income and a stabilisation of the housing market are expected to support spending.
Employment has grown strongly over recent years and labour force participation is at a record high. The unemployment rate has, however, remained steady at 5.2 per cent over recent months. Wages growth remains subdued and there is little upward pressure at present, with strong labour demand being met by more supply. Caps on wages growth are also affecting public-sector pay outcomes across the country. A further gradual lift in wages growth would be a welcome development. Taken together, recent labour market outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.
Inflation pressures remain subdued and this is likely to be the case for some time yet. In both headline and underlying terms, inflation is expected to be a little under 2 per cent over 2020 and a little above 2 per cent over 2021.
There are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne. In contrast, new dwelling activity has weakened. Growth in housing credit remains low. Demand for credit by investors continues to be subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.
It is reasonable to expect that an extended period of low interest rates will be required in Australia to make progress in reducing unemployment and achieve more assured progress towards the inflation target. The Board will continue to monitor developments, including in the labour market, and ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time.

Thursday, August 1, 2019

Has your suburb increased or decreased in the last 12 months?

Perth house prices have dropped on average 9% over the past year and 20% over the last five years which got us wondering how different suburbs have fared. REIWA has a handy website which shows how suburbs have performed over the last 12 months. While the number of sales in each suburb probably vary massively over 12 months, here's what they report for the last 12 months for suburbs in Perth. We've sorted it by growth percentage. How has your suburb gone in the past 12 months?


SUBURB
MEDIAN HOUSE PRICE GROWTH PERCENTAGE
Darling Downs
$912,000
35.60%
East Perth
$1,292,500
28.60%
Glendalough
$590,000
19.50%
Middle Swan
$370,000
19.40%
Jarrahdale
$470,000
19.30%
Menora
$1,250,000
19.00%
Kwinana Town Centre
$350,000
17.60%
Shelley
$960,000
15.00%
Mount Nasura
$455,000
14.00%
Glen Forrest
$563,500
12.70%
Mount Pleasant
$1,250,000
12.10%
Trigg
$1,337,500
11.50%
Wooroloo
$425,000
11.30%
Hillarys
$837,500
10.20%
Watermans Bay
$995,000
9.30%
North Lake
$615,000
8.80%
Cottesloe
$2,250,000
8.40%
Booragoon
$900,000
7.30%
Woodbridge
$620,000
7.20%
Golden Bay
$395,000
7.10%
West Perth
$777,500
6.90%
West Swan
$700,000
6.90%
Chidlow
$447,500
6.50%
East Victoria Park
$645,000
6.40%
Gooseberry Hill
$683,000
6.30%
Kensington
$888,000
6.30%
Beaconsfield
$742,500
6.10%
Waterford
$887,750
5.70%
Edgewater
$527,000
5.40%
South Guildford
$555,000
5.20%
Lynwood
$410,000
5.10%
Bull Creek
$735,000
5.00%
Hazelmere
$470,000
4.80%
Inglewood
$840,000
4.70%
Roleystone
$534,000
4.70%
Wattleup
$560,000
4.70%
Bickley
$795,000
4.60%
Doubleview
$740,000
4.60%
Two Rocks
$360,000
4.60%
Highgate
$849,500
4.50%
Quinns Rocks
$470,000
4.40%
Riverton
$643,250
4.20%
Mullaloo
$657,500
3.50%
Caversham
$444,000
3.30%
Claremont
$1,528,500
3.10%
Osborne Park
$500,000
3.10%
Lathlain
$720,000
2.90%
Swan View
$360,000
2.90%
Wembley Downs
$1,080,000
2.90%
Coolbinia
$1,130,000
2.70%
Mundaring
$572,500
2.60%
Salter Point
$1,180,000
2.60%
Dayton
$430,000
2.40%
Woodlands
$920,000
2.20%
Bedford
$630,000
2.00%
East Cannington
$457,500
1.90%
Munster
$525,000
1.90%
Sorrento
$920,000
1.90%
North Perth
$850,000
1.80%
Hamersley
$533,000
1.50%
Kiara
$408,500
1.50%
Padbury
$522,500
1.50%
Shoalwater
$429,000
1.50%
Carine
$801,250
1.40%
Greenmount
$455,000
1.40%
Ascot
$710,000
1.10%
Ridgewood
$374,000
1.10%
South Fremantle
$1,045,000
1.00%
Willagee
$525,000
1.00%
Balcatta
$495,000
0.80%
Subiaco
$1,315,000
0.80%
Bateman
$725,000
0.70%
Melville
$740,000
0.70%
Mount Lawley
$945,000
0.70%
Singleton
$412,500
0.60%
Eden Hill
$394,500
0.50%
Gwelup
$838,500
0.40%
Como
$901,000
0.10%
Hammond Park
$519,500
0.10%
Anketell
$0
0.00%
Bailup
$0
0.00%
Banjup
$0
0.00%
Baskerville
$0
0.00%
Beechina
$0
0.00%
Belhus
$0
0.00%
Bennett Springs
$435,000
0.00%
Brigadoon
$0
0.00%
Canning Mills
$0
0.00%
Carabooda
$0
0.00%
Cardup
$615,000
0.00%
Challenger
$0
0.00%
Clarence
$0
0.00%
East Rockingham
$0
0.00%
Gidgegannup
$0
0.00%
Gnangara
$0
0.00%
Hacketts Gully
$0
0.00%
Henderson
$0
0.00%
Herdsman
$0
0.00%
Hollywood
$0
0.00%
Hope Valley
$0
0.00%
Hopeland
$0
0.00%
Hovea
$0
0.00%
Jandabup
$0
0.00%
Karrakup
$0
0.00%
Keysbrook
$0
0.00%
Kwinana
$0
0.00%
Kwinana Beach
$0
0.00%
Lexia
$0
0.00%
Malaga
$0
0.00%
Mandogalup
$0
0.00%
Mariginiup
$0
0.00%
Millendon
$715,000
0.00%
Naval Base
$0
0.00%
Neerabup
$0
0.00%
Nowergup
$0
0.00%
Oakford
$0
0.00%
Oldbury
$0
0.00%
Paulls Valley
$0
0.00%
Peel Estate
$0
0.00%
Perth Airport
$0
0.00%
Pickering Brook
$0
0.00%
Piesse Brook
$0
0.00%
Pinjar
$0
0.00%
Postans
$0
0.00%
Red Hill
$0
0.00%
Stoneville
$470,000
0.00%
Tamala Park
$0
0.00%
The Lakes
$0
0.00%
The Spectacles
$0
0.00%
Wangara
$0
0.00%
Welshpool
$0
0.00%
Whiteman
$0
0.00%
Wilbinga
$0
0.00%
Wungong
$567,100
0.00%
Harrisdale
$499,000
-0.20%
Tapping
$475,000
-0.20%
Huntingdale
$379,000
-0.30%
Myaree
$680,000
-0.30%
Bedfordale
$707,500
-0.40%
Brentwood
$617,500
-0.40%
Southern River
$537,500
-0.50%
Alkimos
$397,500
-0.60%
Pearsall
$447,500
-0.60%
Rivervale
$500,500
-0.60%
Success
$510,000
-0.60%
Hilbert
$377,500
-0.70%
Ocean Reef
$716,000
-0.70%
Churchlands
$1,339,000
-0.80%
Karrinyup
$793,750
-0.80%
Manning
$770,000
-0.80%
Palmyra
$625,000
-0.90%
Hocking
$485,000
-1.00%
Joondanna
$643,500
-1.00%
Mindarie
$647,500
-1.10%
The Vines
$643,000
-1.10%
Swanbourne
$1,430,000
-1.30%
City Beach
$1,775,000
-1.40%
Darlington
$572,000
-1.40%
Floreat
$1,331,000
-1.40%
Peppermint Grove
$3,650,000
-1.40%
St James
$517,500
-1.40%
Waikiki
$345,000
-1.40%
Bullsbrook
$320,000
-1.50%
East Fremantle
$1,132,500
-1.50%
Greenwood
$492,000
-1.60%
Hamilton Hill
$467,500
-1.60%
Maylands
$590,000
-1.60%
Merriwa
$315,000
-1.60%
Mount Helena
$460,000
-1.60%
Warnbro
$310,000
-1.60%
Champion Lakes
$432,500
-1.70%
Woodvale
$595,000
-1.70%
Serpentine
$560,000
-1.80%
Warwick
$540,000
-1.80%
Aveley
$437,500
-2.10%
Joondalup
$494,500
-2.10%
Bayswater
$567,500
-2.20%
Bushmead
$655,000
-2.20%
Martin
$440,000
-2.20%
Willetton
$685,000
-2.30%
Midvale
$305,000
-2.40%
Wanneroo
$400,000
-2.40%
Baldivis
$390,000
-2.50%
Cloverdale
$414,000
-2.60%
Connolly
$662,500
-2.60%
Heathridge
$430,000
-2.80%
Hilton
$530,000
-2.80%
Kardinya
$621,500
-2.80%
Bibra Lake
$520,750
-2.90%
Landsdale
$534,000
-2.90%
Lesmurdie
$577,500
-2.90%
Mahogany Creek
$466,000
-2.90%
Kinross
$465,500
-3.00%
Attadale
$1,055,000
-3.20%
Nedlands
$1,607,500
-3.20%
Banksia Grove
$367,500
-3.30%
Bassendean
$481,250
-3.30%
Wattle Grove
$508,500
-3.30%
Secret Harbour
$425,000
-3.40%
Karawara
$588,888
-3.50%
Leeming
$680,000
-3.50%
Ashby
$445,000
-3.60%
Craigie
$424,000
-3.60%
Fremantle
$781,000
-3.60%
Innaloo
$540,000
-3.60%
Marangaroo
$385,000
-3.70%
Parkwood
$430,000
-3.70%
Victoria Park
$635,000
-3.70%
Beeliar
$480,000
-4.00%
Ferndale
$415,000
-4.00%
Madeley
$565,000
-4.00%
High Wycombe
$407,500
-4.10%
Karragullen
$355,000
-4.10%
Rossmoyne
$1,055,000
-4.10%
Tuart Hill
$522,500
-4.10%
Ballajura
$402,500
-4.20%
Mount Hawthorn
$835,000
-4.20%
Port Kennedy
$345,000
-4.20%
Safety Bay
$378,500
-4.20%
Thornlie
$369,000
-4.20%
Sinagra
$440,000
-4.30%
Spearwood
$450,000
-4.30%
West Leederville
$1,194,000
-4.30%
Butler
$369,500
-4.40%
Jandakot
$612,000
-4.40%
Carramar
$487,000
-4.50%
Noranda
$530,000
-4.50%
Stirling
$720,000
-4.60%
Wandi
$472,000
-4.60%
Alexander Heights
$410,000
-4.70%
Applecross
$1,525,000
-4.70%
Mount Claremont
$1,210,000
-4.70%
Scarborough
$715,000
-4.70%
Bicton
$1,000,000
-4.80%
Coolbellup
$420,000
-4.80%
Maddington
$295,000
-4.80%
Wellard
$400,000
-4.80%
Byford
$380,000
-5.00%
Canning Vale
$537,500
-5.00%
Kingsley
$535,000
-5.10%
Nollamara
$370,000
-5.10%
White Gum Valley
$697,750
-5.10%
Darch
$525,000
-5.20%
Duncraig
$660,500
-5.30%
Embleton
$450,000
-5.30%
Kenwick
$304,000
-5.30%
Beldon
$435,000
-5.40%
Bertram
$350,000
-5.40%
Wembley
$967,000
-5.50%
Alfred Cove
$740,000
-5.70%
Ardross
$990,000
-5.70%
Clarkson
$355,000
-5.70%
Leederville
$882,000
-5.70%
Marmion
$855,000
-5.70%
Piara Waters
$481,000
-5.70%
Henley Brook
$466,500
-5.80%
Balga
$301,000
-5.90%
Daglish
$990,000
-5.90%
South Perth
$1,200,000
-5.90%
Morley
$450,000
-6.00%
Atwell
$489,000
-6.10%
Mirrabooka
$325,000
-6.10%
Burns Beach
$775,000
-6.30%
Upper Swan
$450,000
-6.30%
Wilson
$495,000
-6.30%
Carlisle
$472,500
-6.40%
South Lake
$392,000
-6.40%
Beckenham
$390,500
-6.50%
Bentley
$430,000
-6.50%
Rockingham
$360,000
-6.50%
Beechboro
$355,000
-6.60%
Jindalee
$570,000
-6.60%
Aubin Grove
$522,500
-6.70%
Coogee
$770,000
-6.70%
Girrawheen
$305,000
-6.70%
Mosman Park
$1,300,000
-6.80%
Queens Park
$405,000
-6.80%
Walliston
$470,000
-6.90%
Yanchep
$360,000
-7.00%
Kewdale
$455,000
-7.10%
Perth
$775,500
-7.10%
Yangebup
$420,000
-7.20%
Dianella
$555,000
-7.50%
Iluka
$800,000
-7.80%
Lockridge
$280,000
-7.80%
North Coogee
$1,050,000
-7.90%
O'Connor
$585,000
-8.00%
Parmelia
$241,500
-8.00%
Kalamunda
$565,000
-8.10%
Armadale
$225,000
-8.20%
Ellenbrook
$349,000
-8.20%
Winthrop
$820,000
-8.20%
Boya
$485,000
-8.50%
Langford
$325,000
-8.50%
Gosnells
$287,500
-8.70%
Karnup
$345,000
-9.20%
Calista
$245,000
-9.30%
Mundijong
$375,000
-9.60%
Belmont
$416,250
-10.00%
Treeby
$494,500
-10.10%
Midland
$299,000
-10.20%
Forrestfield
$380,000
-10.60%
Samson
$530,000
-10.70%
Shenton Park
$1,100,000
-11.60%
Dalkeith
$2,245,000
-11.80%
Brookdale
$237,000
-11.90%
Cannington
$356,000
-11.90%
Eglinton
$402,000
-11.90%
Orelia
$260,000
-11.90%
Currambine
$475,000
-12.00%
Seville Grove
$299,000
-12.10%
Cooloongup
$250,000
-12.30%
Maida Vale
$450,500
-12.30%
Camillo
$225,000
-12.60%
Carmel
$500,000
-12.70%
Medina
$210,000
-12.70%
Guildford
$580,000
-12.80%
Redcliffe
$390,000
-12.80%
Jane Brook
$455,000
-12.90%
Viveash
$400,000
-13.20%
Westminster
$330,000
-13.20%
Murdoch
$631,000
-13.40%
Whitby
$400,000
-13.40%
Brabham
$372,000
-13.50%
Hillman
$232,500
-13.70%
Yokine
$585,000
-13.70%
Ashfield
$403,000
-13.80%
Koondoola
$275,500
-13.90%
Leda
$254,000
-14.30%
Parkerville
$460,000
-14.60%
Stratton
$280,000
-14.90%
Casuarina
$714,750
-16.10%
Helena Valley
$505,000
-16.40%
Kelmscott
$280,000
-16.50%
Mardella
$625,000
-16.70%
Kallaroo
$667,000
-16.90%
Mount Richon
$394,750
-17.70%
Forrestdale
$337,500
-18.70%
Sawyers Valley
$422,500
-18.80%
North Beach
$880,000
-18.90%
Koongamia
$246,500
-19.20%
Burswood
$820,000
-19.60%
Bellevue
$280,000
-19.80%
Jolimont
$920,000
-23.30%
Cockburn Central
$1,062,000
-24.10%
North Fremantle
$923,000
-25.00%
Northbridge
$845,000
-26.50%
Orange Grove
$620,000
-28.30%
Herne Hill
$346,000
-31.80%
Haynes
$350,000
-32.70%
Crawley
$221,500
-72.90%

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