Mark McLeod’s Market Update – Ray White Chief Executive of Growth

By Domenic Belfiore

11th August 2014

As always, buyer sentiment is largely determined by the combination of local area market conditions and the overall macroeconomic environment. Last week’s decision by the Reserve Bank (RBA) to leave the official cash rate on hold at 2.5% means that rates have now stayed level for one full year.

Regardless of the lack of any official movement, although competition between lenders for home loan customers has led to widespread discounting on fixed rate loans, Australians are still reluctant to lock in rates. reported that a study by AFG, Australia’s largest mortgage broking group, shows just 24% of new home loan customers fixed their rates in June.

In surprise economic news last week, Australia’s unemployment rate jumped from 6% to a 12 year high of 6.4% in July, causing an immediate fall in the Australian dollar to 92.6c US. According to the Sydney Morning Herald article, even more concerning is the rapid rise in teenage unemployment, with the ABS trend unemployment rate for people aged 15-19 currently at 19.3%.

Meanwhile in the property market, RP Data auction specialist Robert Larocca told News that despite a lower number of properties being offered for sale, stable clearance rates indicate there are more active buyers in the market. According to Larocca, historical evidence suggests the “normal” lull in the market for this time of year should be over by the end of the month.

The latest finalised auction results from RP Data show clearance rates at 77% in Sydney, 69% in Melbourne, 37% in Brisbane and 61% in Adelaide. Volumes in other capital cities were too low to yield meaningful averages.

Overseas, speculation continues over the state of the global economy, with the UK Telegraph reporting the world is one shock away from another crisis. According to a leading economics consultancy, Fathom Consulting, the world is sliding towards its next “Minksy moment”, with the biggest risk coming from China. A director of Fathom, Danny Gabay, has drawn parallels between China today and America in 2006, when a number of households began to default on their mortgages but authorities played down the potential impact on the global economy. Experts around the world have determined Australia’s greatest economic risk currently is its overreliance on the country’s biggest trading partner, China.

With the future as impossible to predict as ever and the volume of properties coming to market already rising in anticipation of spring, the opportunities available to those vendors who are able to transact in a less heated environment cannot be underestimated. We encourage you to carefully review all activity around your property this week in light of the current environment.

Up to Date

Latest News


    RISE AND SHINE BRIGHT Stand out in a sea of grey, white and blush toned bedrooms with a light and bright refresh. Your bedroom is your haven – a place to relax at the end of the day and wake refreshed and ready to go. But did you know colour … Read more

    Read Full Post


    Here at Ray White Craigieburn we pride ourselves on going the extra mile to help our clients. However sometimes we underestimate just how much our service can change a persons life. It is not until we receive testimonials like the below that we really appreciate our service being so highly … Read more

    Read Full Post