Hi,
Melbourne’s auction numbers increased over the weekend with 606 auctions being reported to Domain. 437 properties sold under the hammer, 58 properties were withdrawn and 111 passed in. In comparison, the clearance rate for the same weekend last year was 57%.
Firstly, in last week’s market wrap I reported that the Reserve Bank of Australia were due to meet last week to determine the outcome for the cash rate. This was actually incorrect and the RBA are due to meet next week, 20th of May.
Some banks have already started decreasing interest rates ahead of next week’s meeting which is welcomed relief to mortgage holders. Core inflation has fallen into the Reserve Bank’s target range for the first time in three years. Headline inflation remained steady in the March quarter at 2.4% and trimmed mean is at 2.9%, the lowest level it has been since December 2021. It is highly likely that the RBA will drop the cash rate next week, the question will it be 0.25% or 0.50%? Seeing the RBA’s cautious approach, one would think that 0.25% would be more likely with a wait and see approach.
Confidence appears to be building once again in the Melbourne property market but we have felt this stop/start approach many times over the past few years now. Earlier this year, we felt 2025 was going to be a very active year for property buyers and sellers and this came to a halt when Trump’s trade war started and then the federal election date was announced. With the recent school holidays and the federal election over, it feels it may have given the property market another reset and along with the imminent interest rate cut, more buyers seem ready to enter the property market. Investors are circling again (both local and intestate) and home buyers are getting ready to purchase as the fear of property prices going up soon is starting to set in.
Have a great week.
Kim Easterbrook – Managing Director
