Buyer sentiment continues to be heavily influenced by the combination of local area market conditions and the overall macroeconomic environment. After rate cuts in May and June, The Reserve Bank (RBA) continued to sit on the sidelines for the third month in a row last week, leaving the official cash rate on hold at 3.5% after its monthly meeting.
An AAP article said despite growing concerns about a slowdown in China as the Eurozone crisis continues to linger and domestic retail sales fall, the RBA is still keen to see the effects of the previous cuts before lowering rates again. According to the article, most economists are now predicting a November cut, while markets are pricing in a further 100 points in cuts before the current rate cycle ends in late 2013. Westpac’s Bill Evans told the Weekend Economist that recent economic data, in particular the June quarter GDP, has been disappointing and does not dilute the case for lower interest rates. Evans expects two further rate cuts in the December quarter, followed by another cut in early 2013.
Meanwhile in the property market, News Limited reported that Darwin was Australia’s best performing capital city over the last three months, with the latest figures from RP Data showing prices there rose by 5.2%. Conversely, Adelaide was the weakest city, with prices sliding by 2.2%. Sydney and Melbourne, although flat in August, recorded growth of 2.4% and 2.5% respectively over the quarter. Brisbane prices grew by 0.6% while Perth grew by just 0.2%. Research director Tim Lawless said the lowest number of property sales since the late 1990’s combined with a flat winter could provide the foundation for a stronger spring. SQM director Louis Christopher said while he agrees market conditions are a little better than this time last year, it doesn’t mean we’re heading into a boom. Christopher believes Australia’s housing market is becoming more segmented, with falls continuing in Melbourne, Hobart, Adelaide and Canberra, prices stabilising in Sydney, Brisbane and Perth, and a boom occurring in Darwin.
No comments:
Post a Comment