Hopefully some good news for mortgage holders, the Reserve Bank lowering the cash rate by 25 basis points to 3.5 per cent – the lowest level since the global financial crisis. It follows a cut of 50 basis points in May. The Board noted financial sentiment had deteriorated over the past month. The Housing Industry Association says the decision to cut rates will help confidence and activity in residential construction and the wider domestic economy. The Real Estate Institute of Australia added the decision was a good one, but that further cuts are likely to be needed over the remainder of the year. There is now, of course, calls for the banks to pass on the rate cut in full.
Dwelling approvals fell in April, that’s according to data from the Australian Bureau of Statistics. The number of dwellings approved fell 8.7 per cent, seasonally adjusted, following a rise of 6 per cent in March. Approvals for private sector houses fell 11.1 per cent in April, with falls of 36.7 per cent in Western Australia, 26.4 per cent in South Australia and 11.6 per cent in Queensland. Private sector house approvals rose 2 per cent in New South Wales and were flat in Victoria.
And the number of residential properties for sale increased last month, rising by 2.4 per cent. SQM Research reports it had been believed that stock levels may have peaked, but now it seems the peak is yet to come. SQM Managing Director Louis Christopher says the results have been driven by a rapid increase in Melbourne and he believes that house prices are falling for most capital cities.