Hi,
Domain’s preliminary Melbourne auction clearance rate for the weekend has come in at 73%. 552 auctions have been reported, 402 selling, 41 withdrawn and 109 passing in. As a comparison, the Domain clearance rate was 61%.
Tomorrow, the Reserve Bank of Australia will announce whether they intend on cutting interest rates after the surprise ‘rates on hold’ announcement last month. The board wanted to see the result of the ABS’ inflation data for the June quarter before making a decision, which was released at the end of last month. Inflation fell to 2.1% and ‘trimmed mean’ fell to 2.7%. This confirms inflation is under control and whilst unemployment remains low, it did rise in June from 4.1% to 4.3%, this ‘should’ be enough for the RBA to decide to reduce interest rates. And if not, I believe there would be a huge uproar from mortgage holders.
What does this mean for property prices? Interest rate cuts historically result in increased confidence the property market which inturn results in property price growth. There are more people attending open for inspections, more buyers bidding at auction and we are currently seeing slow and steady property price growth in Melbourne.
Some interesting data released from KPMG last week suggests that the Melbourne property market will be the top-performing city for property price growth in 2026 finally ‘waking up’ from the pandemic. They also believe due to affordability issues, that units might outperform houses. There is no argument that affordability will come into play with long term property performance and due to Melbourne’s housing market being unaffordable for many, this also may mean that more people move to regional areas that are a commutable distance to Melbourne such as Geelong.
Have a great week.
Kim Easterbrook – Managing Director
