Hi,
Domain’s preliminary auction clearance rate has been recorded at 56% across 719 auctions. A total of 404 properties sold, 113 were withdrawn, and 202 were passed in. The clearance rate has now consistently remained in the 50% range since the start of March. In comparison, the clearance rate last year was 64%.
As expected, the Reserve Bank of Australia (RBA) raised interest rates by 0.25% to 4.35% because inflation is rising again and is expected to remain high for longer due to ongoing conflict in the Middle East and increases in oil prices.
The Federal Budget is also due to be released tomorrow evening, with rumours swirling that there will be property-related tax changes announced regarding reduced Capital Gains Tax discounts and negative gearing, although the specifics will not be confirmed until tomorrow night.
All these factors have created uncertainty in the property market, and conditions are favouring buyers. Melbourne has now become one of the most affordable capital cities in the country. However, Melbourne could face a worsening housing shortage due to the population continuing to rise and approved development projects not commencing because of uncertainty around building costs. Predictions of a further two rate rises, combined with ongoing global uncertainty, should keep buying conditions as they currently are, which is creating favourable conditions for buyers to enter the market.
Have a great week.
Kim Easterbrook – Managing Director
