Will interest rates be cut today?
The housing market and all connected to it have one question today… will the Reserve Bank of Australia cut the interest rate? Many economists are among those that believe that it will. Peter Martin, economics editor of The Age says it has no choice. Writing in the Sydney Morning Herald he says that the bank’s stated role of contributing to “the maintenance of full employment and the economic prosperity” of Australia can only be achieved through its monetary and banking policies and that the best it can do is cut interest rates. Although the RBA has a responsibility on inflation targets, Martin highlights that oil prices mean that inflation is low at 1.7 per cent and a rate cut shouldn’t cause concern.
Source: Sydney Morning Herald
Capital cities’ price data shows widening gap
The gap between Australia’s hottest housing markets and its weakest is increasing. New data from CoreLogic RP Data for the December 2014 quarter reveals that while prices in Sydney and Melbourne are continuing to escalate that is not the case elsewhere. The median cost of a house in Sydney is $858,000 while the cost of a unit in Sydney ($615,000) is greater than the median cost of a house in every other capital apart from Melbourne ($660,000). Buyers of houses in Sydney paid 30 per cent more than those in Melbourne, 74.4 per cent more than Brisbane, 99.6 per cent more than Adelaide, 56 per cent more than Perth, 145.1 per cent more in Hobart, 52.7 per cent more than Darwin and 49.2 per cent more in Canberra. The premium on units is not too far from those percentages either. The last time the differential was so large was during the boom of 2001-2004. CoreLogic RP Data’s report concludes that the gap is unlikely to increase much further as prices are annualised home value growth is slowing.
Source: CoreLogic RP Data
Free building code is good news for builders
The new National Construction Code has been released online allowing builders free and easy access. The move has been applauded by the Housing Industry Association which says it should cut costs. Senior executive director Kristin Brookfield says: “Compliance with the NCC is a legal requirement, so free and easy access to code should be the standard, as with other regulations. Making the code free online will also save hundreds of dollars each year for builders and contractors.” The HIA says that the next step should be to allow the same access to the many standards that are mentioned within the code.
Source: Housing Industry Association