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TIP: Sydney's best auction month in two years, economists calling timber on rates, W-Week for tax

No, it's not bin day.

Welcome to Today In Property, or as I've abbreviated for the first time today to provide more headline room, TIP - a collection point for the main news stories of the day relating to residential property, and the appetite and ability of Australians to purchase homes.

That appetite and ability appears to be up. AMP Capital's Shane Oliver has declared June to be the strongest month for auctions in Sydney since September 2017, and since February 2018 for Melbourne. Over the weekend, both cities saw preliminary clearance rates above 70 per cent, leading a national average of 66.5 per cent.

The consistently strong post-election auction results have led valuation company Herron Todd White declare Australia's major capitals have hit the bottom or near-bottom of the cycle and are already showing signs of improvement. It reckons Sydney is the only one of the five caps still with some room to fall; Melbourne, Perth and Brisbane are at bottom, and Adelaide is rising.

According to those surveyed in The Australian Financial Review's quarterly survey of economists however, a strong rebound is unlikely. Employment will need to recover, international buyers come back in force, and first home buyers significantly grow in numbers for recovery to happen faster.

Speaking of the latter, NSW treasurer Dominic Perrottet was questioned over the weekend on the state government's persistence with FHB subsidies while it continues to lose housing sector revenue. He reaffirmed his government's commitment to maintaining FHB assistance programs "as long as they are working".

Will the cash rate get the chop tomorrow?

According to the market, there is a 70 per cent chance of an interest rate cut when the Reserve Bank meets tomorrow (Tuesday 2 July). This would bring the cash rate down to a record 1 per cent. Popular opinion among economists has it that we'll see two more rate cuts before the end of 2019.

(If you have another five minutes, this article on ABC News online provides a more detailed assessment of Australia's economy by The Conversation's 2019-20 forecasting panel. Do yourself a favour and be the smartest smarty at the water cooler this morning.)

That said, the Bank for International Settlements has warned national economies trying to right their economic ships with interest rate movement that it alone will not be enough. "You can't fly a plane on one wing."

...which brings us to Canberra

Sticking with the aviation metaphor, if the RBA is one wing, does that make government the other? Parliament resumes this week to debate the government's three-stage, $158 billion income tax package - and all eyes are on Labor.

The opposition still hasn't declared what it intends to do; the word is they haven't decided the best course of action within their own ranks. The Grattan Institute is backing a "no" vote, saying the government's package is too costly. But it all may be out of their hands, if the government can deliver a Senate majority through cross-bench horse-trading.

Whatever happens, it's going to be an interesting week.

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