Industry Market Wrap The ABS released housing finance data for October 2011 this week. The data showed that the volume of owner occupier housing finance commitments excluding refinances increased for the eight successive months and has risen by 1.2% over the past 12 months. The successive increases in owner occupier finance commitments is somewhat encouraging for the housing market however, refinances continue to dominate the landscape, rising by 17.8% over the year however, they did fall by -1.8% in October. The total value of housing finance commitments fell by -2.5% over the month and by -2.4% when refinances are excluded. Owner occupier commitments fell by -1.2% while investor activity slowed by a much greater -5.5%. First home buyer finance commitment volumes continued to improve with 8,939 commitments over the month, the highest volume since December 2009 (12,025) remembering October is prior to the first interest rate cut in November. The volume of first home buyer finance commitments is now 22.5% higher over the year. For a more detailed breakdown of housing finance read this week’s RP Data Research Blog. Westpac and the Melbourne Institute released the results of their monthly survey of consumer confidence. The December Consumer Sentiment Index results showed an -8.3% fall over the month with the index at 94.7 points. With the Index once again below 100 points it shows that Australian Consumers are more pessimistic than optimistic despite the successive 25 basis point cuts to official interest rates. Perhaps respondents have become aware that interest rate cuts are a reflection that the economic outlook is not as strong especially considering the ongoing sovereign debt problems in Europe. Consumer’s feelings about their current conditions (101.3 points) and family finances over the next 12 months (100.3 points) were the only subsets indicating optimism which suggests that although respondents feel conditions may be okay right now they are likely to deteriorate over the coming months and years. Latest National Auction Clearance Rates The weighted average capital city auction clearance rate increased from 44.0% the previous week to 44.9% last week. Auction clearance rates across the combined capital cities have now not broken the 50% barrier for 23 consecutive weeks reflective of the continuing market weakness. Despite the weak clearance rate figures, there was 2,057 capital city auctions last week which remains a significant volume especially considering how close it now is to the Christmas / New Year period. In Melbourne, auction clearance rates improved slightly from 50.0% the previous week to 50.3% last week. In Sydney, clearance rates improved to 45.5% last week from 44.5% the previous week. Advertised Stock on the Market The number of new properties available for sale remains below levels of 12 months ago. New listings at a national level are -3.3% below the level of 12 months ago and across the combined capital cities new listings are -8.4% lower than at the same time last year. RP Data is currently tracking 315,773 properties for sale nationwide and 158,550 properties for sale across the combined capital cities. Total listings remain at inflated levels, 29.3% higher than at the same time last year nationally and 28.8% higher across the combined capital cities. Number of Properties Advertised for Rent The number of new rental listings has increased over the past week both at a national and capital city level. The number of new rental listings is 8.3% higher than at the same time last year nationally and 6.4% higher across the combined capital city markets. Although new listings rose, total listings remained relatively flat both nationally and across the capitals. Total rental listings are currently 0.1% higher than at the same time last year across the nation and -0.2% lower across the capital city markets.