The Housing Industry Association says the Reserve Bank’s decision to keep interest rates on hold could rattle confidence. There had been an expectation of a cut, and HIA chief economist Harley Dale says leaving rates unchanged has the potential to weigh-on sentiment. The body is calling on the banks to provide further interest rate relief in spite of the RBA’s decision to leave interest rates on hold at 4.25 per cent.
But SQM Research Managing Director Louis Christopher says the decision to hold rates is good news. He says that although a cut would have provided relief to mortgage holders in the short term, late last year’s cuts are already starting to have an impact on the housing market, making over-stimulating the property market a real possibility. Mr Christopher believes that had interest rates been cut this month, we’d likely be facing a rate rise at the end of the year.
SQM Research figures show that residential sales listings decreased in January, a 4.3 per cent monthly decline. All cities experienced a monthly drop in sales stock, with Adelaide reporting the smallest decline, falling by 0.3 per cent month-on-month. Year-on-year national stock on the market has increased by 13.5 per cent. Hobart and Melbourne have seen stock increase 40.9 per cent and 33.2 per cent respectively.
And the Real Estate Institute of Western Australia reports that results for the December quarter show the first real indications of housing market recovery in more than a year and a half. The median price for houses and units increased in Perth, sales were up and the number of selling days reduced. The metropolitan median house price is likely to settle at $465,000, up by $5,000 on the September quarter. Apartments increased by just $2,000 to a median of $395,000. However, the number of sale transactions for Western Australia for the year were at their lowest levels in twenty years.
And that is the Real Estate Report, thanks for joining us, I’m Melissa Beaumont Lee for the Finance News Network.
