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RBA looks to tighten screws on home loans
Topic Started: 24 Sep 2014, 01:20 PM (3,598 Views)
miw
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2 Oct 2014, 04:20 PM
That is an extremely bullish chart for multifamily. Very helpful - thanks again.
The overall analysis was not particularly bullish for housing prices in the US though.

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Edited by miw, 2 Oct 2014, 04:42 PM.
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RBA cools property market with gift of the gab

06 Oct 2014
Rebecca Thistleton

The Reserve Bank of Australia’s jawboning has hit the housing market more than many realise, says property stalwart, Ray White chairman Brian White.

Mr White, who has witnessed many booms, bubbles and busts in his 50-plus years with the family business, said the mood had changed and buyers were cautious.

“It’s like a flock of birds turning in the sky. Everyone is so complicit together and you’re left wondering what it was that made all of them turn the other way at once.”

He said comments from RBA governor Glenn Stevens reminding the public house price appreciation was never guaranteed and to be cautious about gearing up had cooled the market as intended.

Mr White has dismissed suggestions Sydney’s market has bubbled, as a bubble suggests frenzied buying, which was not happening.

“We had a big September. We sold more than $3.1 billion worth of property but we’re noticing fewer groups at open for inspections and auctions. You can just tell it’s changed.

“Comments from the RBA do a much better job at cooling things down than an interest rate rise,” Mr White said.

The RBA will meet on Tuesday to discuss interest rates, which are largely expected to remain on hold.

“You never quite know when the market changes. There’s no whistle, no bell rings, it just happens,” Mr White said.

While homes in undersupplied, high-demand areas are hotly contested and selling above reserve, some vendors with high expectations were left disappointed and without a sale at the weekend. RP Data figures showed the preliminary weighted auction clearance rate in the capital cities was 65.7 per cent, down from 70.9 per cent last week and 69.3 per cent recorded this time last year.

In Sydney, auctions were down to about 465 because of a long weekend. RP Data’s preliminary clearance rate for the city was 77.4 per cent. Brisbane had a 52 per cent clearance rate compared with 48.3 per cent last week. Melbourne’s preliminary clearance rate was 65.6 per cent compared with 77.3 per cent last week and 71.3 per cent this time last year.

RP Data commentator Robert Larocca said the market was stronger this year than in 2013. More homes had sold but clearance rates had softened largely due to a drop in demand in Melbourne. “This week’s result provides more evidence that the Melbourne market does have limits and sellers cannot have unrealistic expectations,” Mr Larocca said.

Read more: http://www.afr.com/p/business/property/rba_cools_property_market_with_gift_B0dP6hmTx4DEJaWRhNICTM
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I thought this comment was good.

Mr White has dismissed suggestions Sydney’s market has bubbled, as a bubble suggests frenzied buying, which was not happening.

Was there not frenzied buying in Sydney. Looked that way to me. That would suggest is it in a bubble according to his theory. Just that his analyase was wrong.

Another so called expert.
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RBA's warnings take some heat out of property market, say real estate agents

October 6, 2014 - 6:06PM
Mark Mulligan and Stephen Cauchi

Attempts by the Reserve Bank of Australia to talk down what it sees as overpriced housing markets in Sydney and Melbourne have had some impact, according to real estate agents.

A growing number of property agents around the country are reporting declining numbers at auctions in the two capital cities and less bidding pressure after year-on-year price growth of more than 14 per cent in Sydney and around 8 per cent in Melbourne.

The RBA has recently stepped up its warnings about house prices falling as well as rising in an effort to take some heat out of the property market.

It has also suggested the use of "macroprudential tools" - such as stricter testing of borrowers' ability to withstand interest rate rises - as a way of reducing the build-up of investor and owner-occupier risk from rapidly rising house prices.

Ray White chairman Brian White says this "jawboning" by RBA governor Glenn Stevens had already been effective.

"Comments from the RBA do a much better job cooling things down than an interest rate rise," he told Fairfax at the weekend.

Shannon Whitney, chief executive of Sydney-based real estate group Bresic Whitney, agreed the RBA policy of talking down house prices had had some impact.

"Activity has cooled off its peak from a few months ago," he said.

"The message coming out of the Reserve Bank: people have certainly listened to that.

"If you talk to buyers they probably feel a little less pressured, perhaps a little more thoughtful than they've been for the last couple of quarters.

"We've had that message consistently for a couple of months and I think that tends to put people on their heels a bit."

Their comments follow data from RP Data last week suggesting house price growth across the country cooled a little in the quarter just ended, after a virtually flat September.

The RBA board is certain to hold the cash rate at 2.5 per cent at its monthly meeting on Tuesday, but some economic forecasters expect to see changed language in the accompanying statement around the level of the local currency and property prices.

The reference rate has been at its current record low level since August last year and is unlikely to change until the middle of next year, according to the most hawkish view.

Some economists don't expect the RBA to lift rates until the end of the year, or even early 2016, while not all have completely discounted another small cut.

Much will depend on the consistency of the US economic recovery and the subsequent timing of the Federal Reserve's first interest rate increase.

Speculation mounted at the weekend about an earlier-than-expected rate rise in the US after strong jobs data appeared to confirm a robust economic recovery.

This speculation, coupled with soft commodity prices and concerns about the slowdown in China, have converged to bring the Australia dollar down to around its lowest level in four years.

Westpac says this depreciation - of 7. 5 per cent in the past month - should take some of the sting out of the RBA's normally forthright language on the strength of the currency, and the impact of this on economic diversification in Australia.

"The October statement is likely to be less strident about the currency but still indicate that the bank expects it is too high," Westpac chief economist Bill Evans said in a note.

Most economists also agree that the RBA is unlikely to tweak its guidance on interest rates, which promises "a period of stability" in the official cash rate, currently set at 2.5 per cent.

The strength of the housing market deprives the RBA of the option of another interest rate cut against any external shocks or a strong local currency.

Any reduction in the already record low rate could fuel further house price inflation.

Read more: http://www.smh.com.au/business/the-economy/rbas-warnings-take-some-heat-out-of-property-market-say-real-estate-agents-20141006-10qvji.html
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