Sydney’s auction houses clear fewer properties over the weekend
The clearance rate of Sydney’s auction houses was at a three-month low over the weekend; falling below 80 per cent for the second time in the last three weeks. It wasn’t cause for alarm though as the number of listings was at a high with 753 homes being auctioned and October set to break the monthly record. The level of activity is still hot despite increasing prices with the low mortgage rates tempting many to the sale rooms and feeling confident in the economy in NSW.
Maybe it’s time we built some new cities
The Reserve Bank of Australia’s head of financial stability says building on the fringes of cities isn’t going to solve the problem of undersupply. Dr Luci Ellis told a forum in Sydney that much of the growth in population was coming from foreign students and they want to live in the city not in the suburbs. Dr Ellis said that while housing approvals are at a very high rate, the building has to coincide with people’s requirements. She suggested that it could be time to build new cities; something not done since Canberra.
Commonwealth Bank predicts rate rise will be later
The CBA has revised its prediction on interest rate rises; pushing it back from February to August 2015. With the Reserve Bank accepting that specific measures are needed to reign-in house prices the CBA believes that it will not be necessary to raise interest rates in the short-term as that will have a negative effect on other parts of the economy. If the CBA is right, we should see home loans rates staying lower for almost a year with interest rates held at 2.5 per cent.
Is the housing bubble masking the bigger problems?
Investment bank Goldman Sachs says that talks of a housing bubble will soon fade as other concerns become paramount. It says that a slowing rate in employment and rising inflation will dominate in the coming year, with mining investment and revenues falling. Tim Toohey from Goldman says that they are predicting an ‘income shock’. There is a possibility of interest rates being cut if unemployment becomes problematic.
Tempe property sells in 10 minutes
A young couple were the successful bidders in a short but keenly contested auction for a property in Tempe at the weekend. The Sydney suburb has often been shunned due to the high rate of aircraft activity but it seems buyers are happy to overlook the noise in favor of some lower prices. Properties are being bought quickly with an average listing time of about a week. Median prices are also increasing in Tempe; up 17.1 per cent in the last 12 months to $820,000.