Property Research

In May the Reserve Bank Board cut the cash rate to 3.75 per cent. To read the statement click here.

The annual rate of inflation as reported in the March quarter for Melbourne dropped from 3.1 per cent in the December quarter to 1.4 per cent. This mirrored the change from 3.1 per cent to 1.6 per cent for Australia. A year ago the annual rate of inflation for Melbourne was 0.7 per cent. The reduction reflects conditons observed in the residential housing market. The most substantial impact on the overall outcome was from food which changed from 2.5 per cent on an annual basis to -2.5 per cent.

Victoria’s unemployment rate in April 2012 decreased to 5.3 per cent from 5.8 per cent last month. This is positive news for the local property market. Participation rate for Victoria remains relatively unchanged with an increase of 0.1 per cent to 65.4 per cent from last month. Australia’s unemployment rate in April 2012 has also decreased from 5.2 per cent last month to 4.9 per cent. Participation rate nationwide remains relatively constant with a 0.1 per cent decrease from last month to 65.2 per cent.

December quarter 2011 GDP figures showed that the economy grew by 0.5 per cent, putting GDP growth at 2.1 per cent for the year in seasonally adjusted terms. Non-form GDP increased by 0.3 per cent for the quarter, putting growth for the year at 2.5 per cent.

The Westpac – Melbourne Institute of Consumer Sentiment Index decreased by 1.7 per cent to 94.5 in seasonally adjusted terms, with two of the five components decreasing for the month of April 2012. The current conditions index decreased by 2.8 per cent, resulting in an overall decrease of 11.7 per cent for the year. Also, the expectations index decreased by 0.7 per cent for the month. The main decrease in sentiment was the component index representing family finances vs a year ago (-14.4%), while the main increase was in the component representing good or bad time to buy major household items (+4.3).