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C&G Unpacks the RBA’S March 2016 Announcement
In the latest announcement from the Reserve Bank of Australia, the cash rate has remained on hold once again at 2.0 per cent, where it has been since May last year. But what does this mean for the property market? C&G breaks down the factors surrounding the cash rate, and how it could affect those selling or buying property in Melbourne.
The most profitable industry in Australia
‘The real estate industry is doing well,’ says Peter Martin, Economics Editor at The Age. ‘We’ve got new figures showing that real estate is now Australia’s most profitable industry, replacing mining, which was previously (the) most profitable industry.’ Business investment, excluding mining, is also doing well, with consumer spending climbing as well.
Auction clearance rates
It’s been a great summer for selling, and C&G have been right there amidst the action! The average clearance rate is 70 per cent, with Melbourne performing robustly compared to other cities. This is great news for our vendors, who can be confident of consumer demand creating the competition they need to get the best possible price for their property.
‘Melbourne was amongst the hottest cities in the three months to February, with prices rising 3.8 per cent for a median price of $550,000,’ reports Paul Gilder for the Herald Sun. Sydney experienced a decrease in home values, despite both cities exhibiting strong positioning for property values moving forward.
The job market
The employment rate has experienced a jump from 5.8 per cent in the last RBA update to 6.0 percent at the most recent announcement. RBA Governor Glenn Stevens said that the board would ‘judge whether improvement in labour market conditions was continuing and whether the recent financial turbulence portended weaker global and domestic demand.’ For now, the board appears to be waiting and watching to see if the national employment rate will deliver, before affecting any decisions about the cash rate.
While Glenn Stevens’ comments this month may be perceived as a carbon copy of February’s RBA announcement, economists are expecting the cash rate to stay put until July. Resultingly, C&G considers this an ideal time to sell or buy property - before interest rates experience an upwards hike, and while competition is fierce for Melbourne property – especially at auction. Contact Chisholm and Gamon today to find out how we can help you with your property goals.