Rate to stop a na­tion

Herald Sun - Property - - MARKET WRAP - WITH PE­TER FARAGO

THE na­tion pauses on Tues­day, if only for a few min­utes, for the 155th run­ning of the Mel­bourne Cup.

But while the fo­cus will be on horses com­pet­ing in the 3200m race at Flem­ing­ton, one group will have an eye on the meet­ing of the board of the Re­serve Bank ear­lier in the af­ter­noon.

On the first Tues­day of the month the Re­serve Bank of Aus­tralia an­nounces whether it is to make any change to its mone­tary pol­icy.

Al­though the of­fi­cial cash rate is at a record low of 2 per cent, de­ci­sions by the big four banks to in­crease their mort­gage rates due to higher cap­i­tal se­cu­rity rules have height­ened the scru­tiny on what the RBA might do next.

Many econ­o­mists, and a few real es­tate agents, be­lieve a cut should be made to ward off any sig­nals sent by the banks that the days of low-in­ter­est home loans are num­bered.

Some mar­ket com­men­ta­tors have at­trib­uted the drop in Mel­bourne’s auc­tion clear­ance rate, to 71.1 per cent last week­end, to con­cerns over higher in­ter­est rates.

Oth­ers, how­ever, say it was the ex­tra­or­di­nary vol­ume of prop­er­ties on the mar­ket, largely to get auc­tions out of the way be­fore the Cup week­end.

On the topic of vol­umes, CoreLogic RP Data se­nior re­searcher Cameron Kusher said a rise in the num­ber of newly listed prop­er­ties be­ing added to the mar­ket had not seen an equiv­i­lent lift in the num­ber of sales. This meant that there was enough stock on the mar­ket to last 3.4 months at the cur­rent rate of trans­ac­tions.

“A 3.4 months-of-sup­ply fig­ure shows that de­mand is fairly strong and you would an­tic­i­pate, all things be­ing equal, a fairly fast rate of sale,” he said.

But Mr Kusher said sup­ply lev­els had dipped to as low as 2.8 months in the past year.

He said the in­crease in the num­ber of houses and units on the mar­ket was good news for buy­ers, pro­vid­ing more op­tions for pur­chase and re­duc­ing ur­gency to make a de­ci­sion.

There was plenty of ur­gency in the crowd out­side 115 Garnett Rd, Wheel­ers Hill, which sold un­der the ham­mer for $1.185 mil­lion last Sun­day.

Har­courts Judd White agent Dex­ter Prack said three bid­ders fought over the four-bed­room home, which was sold to a young cou­ple with a new­born.

This week­end there are 521 auc­tions sched­uled as thoughts turn to the Mel­bourne Cup.

A young fam­ily bought this Wheel­ers Hill home for $1.185 mil­lion last week­end.

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