Rate to stop a nation
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.