Following the RBA’s Board meeting this month it was announced as expected, that the cash rate would remain on hold at 3.0%. This was a predictable outcome given a number of positive data releases over recent weeks. In the RBA Governor’s statement he noted that, "The prospect of inflation declining over the medium term suggests that scope remains for some further easing of monetary policy, if needed.“
No doubt the RBA took into consideration the improving conditions in Australia’s real estate market.
Released last week the RP Data-Rismark Monthly Indices Release reported that home values in all mainland capital cities except Perth have recorded growth during the first four months of 2009. Darwin (5.3%), Melbourne (4.4%) and Sydney (3.9%) lead the way in terms of value growth and nationally, property values have risen by 2.8% during the first four months of 2009.
First quarter Gold Coast figures for houses and units were respectively +1.5% and -2.37%. For Elanora they were +4.04% and +14% but for Palm Beach the figures were negative at -3.13% and -4.37%. For Burleigh Waters they were +2.94% and +2.5%. We expect these figures to improve as more current data gets into the system.
There was a variety of other data releases relevant to the property market this month whilst the share market appears to have also turned a corner with the S&P/ASX 200 recording its highest value of the year during the week. Meanwhile, the Australian dollar has rebounded strongly against the US dollar and now hovers above the 80 US cents barrier.
Building Approvals data to April 2009 released by the ABS last week showed that the most recent month saw a strong rebound in new dwelling approvals.Comparing March 2009 to April 2009 saw an increase in building approvals of 7.5% with monthly approvals sitting at their highest level since October 2008.
Data released by Fitch Ratings found that mortgage arrears have fallen during the first quarter of 2009 and this was the first time in 10 years that the first quarter of a year had witnessed a fall compared to the final quarter of the previous year.
According to their index, delinquencies of more than 30 days decreased to 1.52% during the first quarter of 2009, compared to a rate of 1.75% in the final three months of 2008.
Low interest rates have probably had a greater impact on these figures than any of the stimulus spending.
by David Hamilton Rates on hold as the good news keeps coming in
palmbeachfn.com.au June 2009
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