New data that suggests a slowdown in home prices could mean that the Reserve Bank of Australia holds off any intervention to cool the market. The figures from CoreLogic show small increases in Sydney, Perth, Brisbane and Hobart with a drop in Melbourne and the other capitals. CoreLogic’s Cameron Kusher says the peak in home value growth was in April and what we are now seeing is a typical cyclical correction. If the trend continues it may mean that the natural course of prices avoids any direct action from the RBA; although any action is likely to be more concern to banks than to those wishing to borrow.
Sydney marks new spring auction record
Saturday’s auctions in Sydney set a new record for the number of listings with 1,058 available. Not all of them sold of course and the high level has kept the clearance rate lower for the last few weeks. While the coming weeks are likely to see a slowdown for buyers as we approach Christmas it seems that sellers are still hoping for a last-minute sale and auction numbers are expected to remain high for the next couple of weekends.
Expert warns that most price guides are inaccurate
Price guides are frequently underquoted to get buyers through the door says a property expert. Patrick Bright from EPS Property Search has told the Sydney Morning Herald that the system of guide prices is “horribly broken” but that the NSW government won’t fix it. Meanwhile in Victoria the hope of a law to force accuracy has ended with the change of government, although there is a plan to increase transparency. Bright says that NSW guides are wrong in up to 80 per cent of cases and is trying to force a change with an online petition. The Real Estate Institute in the state doesn’t agree with him that the system needs fixing though and says that legislation already requires accuracy and says there is only a small amount of wrong-doing by agents.
Could the low oil price lead to lower interest rates?
The lower price of oil together with a continued downturn in commodities could lead to a reduction in interest rates. With the growth in prices slowing and many countries in Asia and Europe concerned about deflation there could be delays in interest rate rises or even cuts in some countries. The Reserve Bank of Australia is still holding interest rates at 2.5 per cent for now, with the second half of next year the likely time of any rises. However, a growing number of analysts are suggesting that there could be a cut in interest rates if inflation continues to be sluggish. Assuming the cuts are passed on to consumers that could mean good news on home loan repayments.
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