July 15, 2024

Vagmare.com

The Intersection of Information and Insight

RBA Board holds in December, but November rate hike may have already slowed housing market

2 min read

The RBA held the cash rate steady at 4.35% for its last meeting of the year.

This was broadly expected as several data flows came in weaker through November.

Retail trade fell -0.2% month-on-month, and although still low, the unemployment rate ticked up 20 basis points to 3.7% in October.

The monthly CPI measure also declined, but this may have had less influence on the RBA decision.

That’s because October CPI was impacted by various subsidies, including the increase to the Commonwealth Rental Assistance, and excluded some services where inflation is more persistent.

This gave a less clear read on inflationary pressures.

Offsetting the weaker data flows was a surprisingly strong month of housing lending in October, up 5.4% month-on-month.

The uplift in lending may be short-lived, however, with CoreLogic currently estimating a month-on-month decline in sales volumes over November.

Recent market performance indicates that while housing has been surprisingly resilient this year in terms of capital gains, interest rate increases have had some impact.

This is particularly the case where rate increases were unexpected.

This was evident following the ‘surprise’ rate hike through June and appears to have had some impact through November.

CoreLogic’s national Home Value Index recorded its lowest monthly increase since February, with values up just 0.6% in November.

The slowdown in housing market performance has been led by Melbourne, where values actually fell -0.1% in November.

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | Newsphere by AF themes.