The RBA's decision to leave rates on hold will improve housing market confidence

As the housing market emerges from the traditionally quieter winter period and with dwelling prices generally flat at present, the RBA’s decision to leave interest rates unchanged  was the right move.

Despite figures from Deloitte this week perhaps surprisingly showing better than expected retail sales for the first half of the year, there is little doubt that a steady interest rate environment is essential for the ongoing health of the economy in general and the housing market specifically.

There is still a degree of caution among consumers, and sentiment remains subdued in most discretionary categories.

This caution extends to the housing market, and as such the decision to leave rates unchanged is an important platform for confidence to improve going forward.

Having said this, it is encouraging to see activity appearing to improve with the onset of spring. Traditionally the strongest selling period of the year, this spring takes on extra importance given the subdued transactional activity in the year to date.

The good news is clearance rates in the Sydney market have improved in recent weeks, and genuine buyers are emerging with a greater determination to secure their desired property.

Vendors who have waited for spring to go to market can expect well presented, realistically priced properties to be the subject of stiff competition.

The more affordable markets are attracting substantial interest from owner-occupiers as well as investors seeking to capitalise on the low interest rate environment, while the prestige market appears to have stabilised in recent times.

Current market conditions appeal to a broad range of buyers.

Despite the banks continuing to apply tight lending criteria, for those with the financial capacity the current market presents some compelling opportunities.

Investors are increasingly recognising the positive fundamentals, while first-home buyers’ incentives are still applicable for certain properties. In particular, those looking to upgrade have a significant opportunity to capitalise on the closing price differential between the middle and top-end markets, with prestige prices stabilising.