Today in property: price decline slowing, calls to keep rates on hold intensify, can AU's luck hold?

Don't call it a comeback.


The headline of James Kirby's editorial in today's The Australian reads "The property market is stabilising, not rebounding." He's talking about the Corelogic house price index figures for May released yesterday, showing a 0.4 per cent price fall nationally. For context, this is the smallest month-on-month drop in 12 months.


Sydney and Brisbane prices dropped 0.5 per cent in May, and Melbourne fell 0.3 per cent. Darwin had a nasty month, with the worst decline (1.6 per cent) while Adelaide actually grew by 0.2 per cent.


Settling, not reviving - yet. CommSec reckons Sydney saw a post-election bounce that will need to be watched. Corelogic is advising that the market still has some months of further declines ahead of it, with a bottoming out late this year.


The most pessimistic of economist points of view reported today came from Standard & Poor's, which has advised its clients that the decline of Sydney and Melbourne house prices still has another six to 12 months to run. While sentiment is stabilising, it said, there is still too much uncertainty around recent developments that have prompted the beginnings of a change in the weather.


S&P isn't alone in putting a hold on cracking the champers just yet. Steward Wealth's James Weir has an opinion piece aimed at property investors in today's AFR that warns caution when considering buying in Sydney or Melbourne at the moment. "There's a difference between investing and speculating."


To cut or not to cut...


In the blue corner, Treasurer Josh Frydenberg made hay yesterday urging the banks to "do the right thing" and pass on the Reserve Bank rate cut he expects will be handed down today. With the Q1 national accounts due to be released on Wednesday expected to show the lowest annual growth since 2009, JoFry (apologies, GOT fans) has clearly laid his bets on the outcome of the RBA's meeting later today.


ABC.net.au's Andrew Robertson is arguing today that the reputation of the big four banks hinges on what it does next, citing the ever-present spectre of the Royal Commission.


In the red corner however, is the small but compelling choir of CEOs and chairmen quoted yesterday calling for rates to be held at their already-record low of 1.5 per cent. The AFR's Matthew Cranston has laid out three reasons why the RBA might listen to them: quantitative easing may be a better way to stimulate growth at the moment, employment participation is better than the unemployment rate suggests, and the incoming federal government's tax cuts acting as fiscal stimulus.


Then there's the underlying argument that cutting rates now will mean we have nowhere to go if all things economic get really bad. As the ABC's business editor Ian Verrender laid out yesterday, Australia dodged the worst of the GFC and is faring relatively well in the current economic climate - but for how much longer can our luck continue?


Meanwhile, Mirvac has acted on its $750 million capital raising last week to purchase the Melbourne CBD build-to-rent project opposite Queen Victoria Market, for $333 million and change. It's a shot in the arm for the fledgling build-to-rent sector in Australia, which Mirvac said last week would become an escalating investment focus for what is now Australia's largest listed REIT.


Speaking of apartments, Fitch Ratings has released a special report "Settlement Risk Manageable for Australian Developers" that expresses confidence in Mirvac and Lendlease's ability to weather uncertainty bred by increasing risk in settlement defaults in the sector.


Someone should tell that to GR Capital, the collapse of which has led to 25 apartments in its "The One" development in Hurstville becoming the subject of a fire sale this week.