No new stock
CoreLogic reported new property stock listings down by 34 per cent in Sydney from a year earlier, and also down by 34 per cent in Melbourne as vendors increasingly look to pull up the ladder.
There are so few forced sellers, and so few are selling.
Certainly in the select areas of Sydney where we're active there is very little coming on to the market, meaning lots of competition for the good stock when it does eventually come along.
Total listings in April fell 11 per cent in Sydney, 9 per cent in Melbourne, and 7 per cent in Brisbane.
Easter and ANZAC Day should be taken into account here, but total listings are no longer higher year-on-year in Sydney, though they remain 18 per cent higher in Melbourne, and 15 per cent in Canberra.
In some areas of Sydney, such as the eastern suburbs and lower north shore, stock is pretty tight.
Source: SQM Research
In others, however, such as Parramatta, the Hills District, Western Sydney, and South Western Sydney, there remains an awful lot of idle stock with few willing buyers.
SQM Research's findings are mirrored closely by those of CoreLogic:
Stalemate
Retail turnover volumes were negative in Q1 following on from a flat preceding quarter, which is another poor indictment of household sentiment, following on from another drop in new vehicle sales.
But even with inflation miles below target and decelerating - and most leading indicators weakening - the Reserve Bank left rates on hold today at 1.50 per cent.
The wording of the statement showed that there's basically no prospect any time soon of inflation getting back to the mid-point of the target 2 to 3 per cent range.
This is causing plenty of angst, since there seems to be little prospect of fiscal stimulus, and lending practices remain often very pedantic.
With with the RBA's forecasts assuming no improvement in the unemployment rate, markets still expect rates to be cut as the construction boom unwinds.
With with the RBA's forecasts assuming no improvement in the unemployment rate, markets still expect rates to be cut as the construction boom unwinds.
I'll leave it to the experts for commentary around triggers and timing, but some time between now and August seems to be more likely than not.
Risks to the shadows
On credit flows, I'm not sure casual observers appreciate just how painful mortgage processing has become.
There are new instances every day of punishingly microscopic analysis of applications (and this where the floor assessment rate is often several hundred basis points at least above the mortgage rate).
There are new instances every day of punishingly microscopic analysis of applications (and this where the floor assessment rate is often several hundred basis points at least above the mortgage rate).
From auditing of expenses on shoes, pet food, or kebabs, to rogue family photos of possibly undeclared offspring (!), surely this stuff is achieving little of meaningful use.
More likely it will push riskier lending and practices to the shadows, with Pepper's loan growth now approaching 20 per cent year-on-year, and other non-bank (and foreign) lenders doubtless not too far behind.
