RBA inches closer to folding

Housing prices down 5pc in 2018

The ABS released its residential price indexes this morning for 2018.

With all the usual disclaimers about there being markets within markets within markets, detached house prices across the eight capital cities fell 6 per cent over the calendar year, and attached dwellings (including units, townhouses, and terraces) fell by 4 per cent.

Overall, median prices were 5 per cent lower. 

In Sydney, prices peaked in mid-2017 on this index (there's clearly a bit of a lag effect, as prices were seen to be on the way down a few months sooner than that) and detached house prices have fallen 9.8 per cent since that time. 

Attached dwelling prices across Sydney were also 7.7 per cent below their 2017 peak. 

The capital city indexes diverged during the mining boom, but have generally now converged again.

Tighter lending standards have impacted all markets - including those that were already struggling - making a bit of mincemeat out of the argument that the slowdown was driven by Sydney's apartment supply.

Australia's 'mean' dwelling price has fallen from $690,000 to $650,000 as the total value of dwelling stock fell to $6.7 trillion, down from $6.9 trillion a year earlier.

The figures for the total number of dwellings can and will be revised, but do show the faster pace of building in New South Wales since 2015, which is now getting set to slow again. 

The ABS now estimates Australia has 10¼ million dwellings. 

Finally, someone will always write somewhere that dwelling transfers are at record lows - but the figures are preliminary, and as ever will be revised up next quarter.

Finger on the button

The Reserve Bank's March 2019 Minutes suggested that the Board is teetering closer to the brink of rate cuts.

Closer reading of the Minutes is succinctly explained by Ricardo here.

Although logically it'd surely take more than one weak jobs figure to trigger a change of stance.