Week’s Key Focus
The latest data suggests that Australia’s inflation rate is lower than expected, reducing the likelihood of the Reserve Bank of Australia (RBA) announcing an interest rate hike next week. However, bond traders anticipate that the RBA might cut interest rates at least twice in 2024. According to the Australian Financial Review, the market widely expects the first rate cut to occur in August. David Bassanese, Chief Economist at Betashares, noted that while global central banks are moving towards a more accommodative policy, the timing remains uncertain. He pointed out that the “stickiness” of inflation in Australia’s service sector could lead to an overly pessimistic market outlook.
The latest quarterly data shows that Australia’s annual Consumer Price Index (CPI) has fallen to 4.1%, the lowest in two years, down from 5.4% a year earlier. The underlying inflation rate, closely watched by the RBA, also decreased from 5.1% in the third quarter to 4.2%, below the expected 4.5%. Despite the slowdown in inflation, it remains above the RBA’s target range of 2%-3%. Scott Rundell, Chief Investment Officer at Mutual, is skeptical about two rate cuts this year, arguing that it is unlikely to happen while inflation exceeds the target. Tim Hext, Head of Government Bond Strategy at Pendal, also mentioned that the decline in oil prices had an impact on the reduction in inflation for the fourth quarter.
The RBA is expected to keep the cash rate unchanged at 4.35%. The market will be closely monitoring any subtle changes in the RBA’s wording, anticipating that it will adopt a dovish tone similar to that of the Federal Reserve.
Auction Results Last Week
— Sydney
: Of the 540 houses put up for auction, results were reported for 334, with 242 selling. The clearance rate was 72%, with a total auction value of AUD 273,000,188 and a median house price of AUD 1,310,000;
— Melbourne: Out of 423 houses in the auction, results were reported for 330, with 216 selling. The clearance rate was 65%, the total auction value amounted to AUD 152,946,900, and the median house price was AUD 850,000.
Top 5 Auction Prices in Sydney Last Week: Houses
▼TOP 1. AUD $3,735,000
Address: 60 Lauderdale Av, Fairlight NSW 2094
Building Size: 396 sqm
House | 4 Bed | 2 Bath | 1 Parking
▼TOP 2. AUD $3,715,000
Address: 310 Kissing Point Rd, Turramurra NSW 2074
Land Size: 935.8 sqm
House | 4 Bed | 3 Bath | 2 Parking
▼TOP 3. AUD $3,550,000
Address: 86 Kentwell Rd, Allambie Heights NSW 2100
Land Size: 696sqm
House | 6 Bed | 4 Bath | 3 Parking
▼TOP 4. AUD $3,402,000
Address:14 Ashmead Av, Castle Hill NSW 2154
Land Size: 732 sqm
House | 5 Bed | 4 Bath | 3 Parking
▼TOP 5. AUD $3,300,000
Address:28 Finch Av, East Ryde NSW 2113
Land Size: 632 sqm
House | 6 Bed | 3 Bath | 2 Parking
Top 5 Auction Prices in Sydney Last Week: Units
▼TOP 1. AUD $3,950,000
Address: 8/48a Queenscliff Rd, Queenscliff NSW 2096
Unit | 3 Bed | 2 Bath | 1 parking
▼TOP 2. AUD $2,675,000
Address: 3 Barellan Av, Carlingford NSW 2118
Semi| 5 Bed | 4 Bath | 2 Parking
▼TOP 3. AUD $2,500,000
Address: 6 St James Av, Glebe NSW 2037
Terrace| 3 Bed | 2 Bath | – Parking
▼TOP 4. AUD $2,350,000
Address: 3b Pines Pde, Gymea NSW 2227
Semi | 4 Bed | 3 Bath | 2 Parking
▼TOP 5. AUD $2,222,000
Address: 15/2-8 Darley Rd, Manly NSW 2095
Unit | 2 Bed | 2 Bath | 1 Parking