SYDNEY (BLOOMBERG) - Sydney houses are hitting the market at the slowest pace since 2004 and Melbourne is also seeing a dramatic slide in sellers, adding to concerns that Australia's housing slump will sap economic growth and force the central bank to cut interest rates.
New advertisements for Sydney homes dropped 21.5 per cent in the three months to April from a year earlier on the Domain real-estate website, according to a report on the site.
Melbourne listings tumbled 23.3 per cent and the number of new homes for sale there is at the lowest in almost a decade, Domain data show.
The Reserve Bank of Australia on Friday (May 10) slashed its growth forecasts as the crumbling housing market prompts householders to spend less.
Economists and fixed-income traders expect the central bank will cut interest rates twice within a year, after it decided against easing policy on Tuesday as it waits to see whether the persistent hiring strength of the past two years is maintained.
"Growth in the Australian economy has slowed and inflation remains low," the RBA said in its quarterly statement on monetary policy. "Subdued growth in household income and the adjustment in the housing market are affecting consumer spending and residential construction."
Domain data show the overall stock of houses listed in Australia's two largest cities has risen over the past year as the time taken to sell homes increases.
While the RBA held borrowing costs this month, some of the country's largest banks have been reducing the rates charged for a variety of mortgages.
Australia & New Zealand Banking Group Ltd lowered some of its fixed-rate mortgage levels, cutting the three-year by 30 basis points and the five-year by 20 basis points for principal and interest loans, according to an e-mailed statement.
The two-year rate on interest-only credits was reduced by 20 basis points.
The Australian Financial Review reported that Macquarie Group reduced rates on fixed- and variable-rate mortgages. Macquarie confirmed the rate changes in an emailed statement.