National Property Market Update

Curious to know what is happening in the property market from an Australian wide perspective?

An update below from Ray White's CEO of Growth, Mark Mcleod

As always, consumer sentiment continues to be heavily influenced by the combination of local area market conditions and the overall macroeconomic environment. The buzz sparked by the Reserve Bank’s (RBA) early October decision to cut the official cash rate by 0.25% continued throughout last week, although the likely effect on the economy remained unclear.

In an unpopular move, ANZ finally joined the other major lenders late on Friday by announcing it would not pass on the full cut to consumers. A news.com.au article reported that the lender’s reduction of 20 basis points takes the ANZ variable rate to 6.6%, level with Commonwealth Bank. While acknowledging global funding costs have actually dropped, ANZ chief Philip Chronican blamed intense competition for deposits for the increase in overall costs.  

According to the Sydney Morning Herald, consumer confidence has risen for the second month in a row, based on the latest Consumer Sentiment Index produced by Westpac and the Melbourne Institute. The number of optimists now almost equals pessimists with many households feeling more secure in their finances, while remaining cautious about the long-term economic outlook. Despite the increase, Westpac’s Bill Evans told Property Observer the result was disappointing. Meanwhile, the International Monetary Fund (IMF) have downgraded its 2013 Australian economic forecast, warning of sluggish economic growth globally throughout this year and next.

The Herald Sun reported domestic unemployment is now at its highest level in more than two and a half years after the release of the latest data last week showed the jobless rate jumped to 5.4% in September. Mining giant BHP has announced it plans to slash jobs due to weakening conditions in China and falling commodity prices. In response, most economists are now predicting another interest rate cut on Melbourne cup day, although consumers are now sceptical of the banks passing the savings on.