Auctions ignite on lower volumes
If there had been a chance of interest rates being cut further this year, there really isn't now.
Last year, auction markets limped over the line towards the end of the year, but this year is turning out to be a different story entirely.
Capital city preliminary auction clearance rates accelerated to their highest result for the entire year at above 80 per cent nationally, according to CoreLogic.
Sydney's blistering preliminary result of 85.6 per cent wiped the floor with the 61.3 per cent result seen this time last year when macroprudential tools were beginning to bite.
Meanwhile, Melbourne also posted an 81.8 per cent result which was much higher than the corresponding weekend from the prior year.
The other capital cities don't play host to so many auctions, and thus don't contribute so much on a weighted average basis.
Notably, stock levels are well down on the prior year, leaving less choice for buyers.
Rates on hold
The Australian Bureau of Statistics will release its Consumer Price Index (CPI) or inflation figures for Q3 2016 on Wednesday this week.
While a soft annual underlying result may be expected, even a core quarterly print of ~0.4 per cent would still marginally lift the annual inflation result to 1.6 per cent from 1.5 per cent (and slightly higher still on a 6-month annualised basis).
A speech by the new governor of the Reserve Bank of Australia Philip Lowe last week suggested that he'd be fairly comfortable running inflation below the target 2 to 3 per cent range for some time.
As such, a result like this cold fairly easily be 'marketed' as the inflationary nadir having passed.
And for that reason I'd hazard that there's now very little chance of interest rates being cut into housing market activity as strong as this.
Barring an extraordinarily weak CPI result, then, rates are on hold until next year.