Australia: Housing markets spring has sprung – ANZ

Research Team at ANZ, suggests that it’s not quite spring yet, but the housing market in Sydney and Melbourne has sprung in to action following the 2 August rate cut from the RBA.

Key Quotes

“While the rate cut was a few weeks ago now, it can take time to filter through to fortnightly or monthly repayment schedules (which is when households have full visibility of the impact on their hip pocket). In seasonally-adjusted terms, auction clearance was 83% and 74% in Sydney and Melbourne respectively last weekend. Now the volume of auctions remains somewhat lower than a year ago, but we would have thought that would change if market clearance rates remain elevated.

House prices have started to tick up and the real question is whether this can accelerate on the back of such strong auction clearance rates. It’ll be interesting to watch how this unfolds, given that the RBA recently assessed that the risks from housing had “diminished”. Aside from implications for monetary policy, how house prices perform is important for consumer spending – particularly in a low wage environment. Indeed, consumer spending rarely accelerates if house price growth is moderating.”