Melbourne market revives ahead of Reserve Bank rate call
The Victoria capital outpaced other states in auction activity and clearance rates as buyers rushed to market ahead of a widely anticipated rate cut.
THE number of homes going under the hammer is set to soar after the RBA’s predicted rate cut on Tuesday.
Melbourne led last weekend’s auction market as bidders looked towards a possible 0.25 per cent or even 0.50 per cent drop in the cash rate at the next Reserve Bank meeting.
While Cotality’s Tim Lawless said there was a slight slowdown in clearance rates compared to the past two weeks, activity was up year-on-year.
And the number of auctions scheduled for the coming week is up by almost a third.
“After holding above the 70 per cent mark for the past two weeks, the preliminary auction clearance rate slipped back to 68.8 per cent across the combined capital cities,” he said.
“Although the early clearance rate has slid a little, it remains slightly above the year-to-date average of 68.0 per cent.
“From a volume perspective, 1,835 auctions were held this week, the highest volume since the week prior to Easter when 3,066 homes went under the hammer.
“It seems that many vendors are holding out for the RBA’s interest rate decision next week.
“With the cash rate widely expected to reduce, the volume of scheduled auctions is set to rise to around 2,360 next week – a 29 per cent jump on the current week, before rising to around 2,700 auctions the week after.”
Ray White analysts noted that the market was show ‘remarkable resilience’.
Chief Economist Nerida Conisbee said April data confirmed the acceleration of price growth that began in January, with house prices nationally rising by 0.4 per cent to reach a median of $917,433, representing an annual growth of 5.2 per cent.
The unit market showed even stronger monthly momentum with prices increasing by 0.5 per cent to $685,637, delivering a yearly growth rate of 4.6 per cent.
“This widespread acceleration suggests we’re entering a new phase in the market cycle, with 13 out of 14 regions showing accelerating growth when comparing recent three-month periods,” Ms Conisbee said.
Housing market analyst Andrew Wilson noted that the Melbourne market was performing best.
He said: “The clearly reviving Melbourne market continues to produce the highest clearance rates of all the capitals from the highest listings.
Ray White Victoria and Tasmania chief auctioneer Jeremy Tyrell said that while auction volume was below 200 for the Ray White network across Victoria this week, bookings were flooding in.
“Is this the calm before the storm? Now that the election is firmly in the rearview mirror, advance auction bookings are now flooding in and it appears we’re in for a very busy run into the end of the financial year,” he said.
