The Reserve Bank is really busy this week. The annual Cup Day board meeting is here along with the release of the Statement of Monetary Policy’s latest batch.

There will be no change in interest rates as is the trend since 2016 and will stay at 1.5%. The inflation, unemployment and GDP growth will also remain untouched. The RBA’s view may not be affected by the batch of data that was released last week.

The core inflation missed the RBA’s target is almost a given these days.

The issue of concern is the decreasing prices of house that feeds the retail sales as well as the consumption. The figures of the retail sales of Friday were not so good. The growth rate is so low that it is almost negligible, up by 0.2% only in September quarter. The sectors that are hit the hardest include household goods and mostly the ones in discretionary spending.

The property auction results were also pretty bleak for sellers, but the buyers who turned up benefited from it. The preliminary clearance rate of Sydney was 44% as compared to the 60% of the previous year. In Melbourne, 42% of the properties were sold, less than 67% from the previous year. In Brisbane, less than one-third of the auctioned properties were sold.

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The head of SQM property researcher, Louis Christopher, said that such results could lead to decrease in prices by 3% a quarter and lead the market to a “crash” trajectory. He added as per reports, several properties have been withdrawn in Sydney. Around 170 have been withdrawn and 222 have been sold. This is a really high ratio.

Maybe it’s a coincidence that as the retail sales hit the brakes, property market began to fall.

Source: Madrid Journals, ABC.net