Hi,
A big auction weekend with 817 auctions being reported to Domain. Of that, 574 sold, 177 passed in and 66 were withdrawn resulting in a clearance rate of 70%. In comparison, the same weekend last year produced a clearance rate of 59%.
There were no surprises last week with the Reserve Bank deciding to keep interest rates on hold but they warned the likeliness of another interest rate cut this year is declining. Stronger than expected household spending was recorded in August and the RBA are not willing to reduce rates until they have received quarterly data from the Australia Bureau of Statistics, which they deem to be more accurate than the monthly data. The next round of quarterly data is due at the end of October, just in time for the next RBA meeting with is the 3rd and 4th of November.
The lack of interest rate movement has removed any FOMO (fear of missing out) in the property market, but it has created stability, which is not such a bad thing. That being said, the sub $950,000 market may start feeling the heat with the rollout of the first home buyers’ guarantee from the federal government.
The 5% Deposit Scheme will allow first home buyers to secure a home loan with a deposit as low as 5% without needing to pay Lenders’ Mortgage Insurance (LMI). The federal government will provide the bank a guarantee for upto 15% of the sale amount. There are no place limits or income caps to first home buyers who can acccess the scheme.
The spring selling season has begun which means more stock has already come onto the market (properties for sale) and with the chance of no more interest rate cuts for the rest of 2025, this may mean the price pressure may be eased for properties in the $950,000 plus market and we may see some reasonable buying conditions. The sub $950,000 market will likely see some increase in demand as more buyers enter these markets through the first home buyers’ guarantee.
Have a great week
Kim Easterbrook – Managing Director
