The Reserve Bank dutifully announced that the official cash rate would remain on hold for the eleventh month in a row at 2.5% last week. Prior to the news, experts had unanimously predicted no change, while the majority were also expecting rates to remain on hold until at least the end of the year.
What was perhaps less expected was the news early this week that Suncorp Bank was dropping its average variable loan rate to just 4.65%, with a three year fixed rate available at 4.84%. With the four major banks advertising variable loan rates of between 5.18% and 5.33%, Suncorp’s move is likely to spark another round of competitive offerings in the battle for new customers.
While demand remains healthy in a historically low interest rate environment, supply in the property market has fallen according to the latest data from SQM Research. The total number of properties for sale in Melbourne fell by 9% in June, remaining 7.5% lower than the equivalent period last year.
Meanwhile, RP Data has reported that after recording the largest fall of any capital city in May of 3.6%, Melbourne property recovered in June to post the highest rise of 1.8%. The group describes the data as indicative of a stabilising market, with house values growing 3.3% over the year-to-date and unit values flat.
Auction clearance rates remained buoyant throughout last month, with APM recording a Melbourne weekend average of 73% over June. Briefly outshining Sydney at the end of the month, a strong clearance rate of 75% over the final weekend of the month was the city’s best result for seven weeks.
With a healthy balance between supply and demand, opportunities for both parties exist currently to transact in a less pressurised environment for mutual gain.