Melbourne auction clearance rates soar despite Reserve Bank hiking interest rates for the fifth time
Buyers in one major Australian city have been swooping in despite the latest Reserve Bank increase.
Auction clearances rates have soared in Melbourne despite the Reserve Bank of Australia last week hiking interest rates for the fifth time this year.
The proportion of homes taken to auction, selling above the reserve price, soared to 67.4 per cent, up from 48.1 per cent the previous week, marking the best weekend since the start of the year before the Federal Budget changes to negative gearing and capital gains tax concessions.
Ray White chief auctioneer for Victoria, Luke Banitsiotis, said owner-occupiers looking for a home ready to move into were competing for scarce properties with sellers reluctant to list in a falling market.
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By continuing you agree to our Terms and Privacy Policy.“There’s not enough quality on the market; if you want to buy an ex-rental property, or something that needs a bit of work, there’s plenty of options there but if you’re looking for a move and ready family home, we still have a lack of supply so buyers are having to compete a little bit on those,” he told The Nightly.
“If you don’t need to sell, people are certainly holding off at the moment.
“It’s basically an owner-occupier market at the moment, we’ve seen about a 50 per cent reduction in the amount of investors transacting in our marketplace.”
But Mr Banitsiotis is expecting more investors to return to the market should the Coalition win the November 28 State election, ending 12 years of Labor rule, with Liberal leader Jess Wilson’s party widely expected to relax Labor’s strict requirements on landlords.
“The election’s probably going to be a turning point for our market,” Mr Banitsiotis said.
“If we see a change of government, and where our prices sit, and we potentially see some changes to the rental system that make it look slightly more attractive to investors, you actually might see particularly interstate investors start paying a bit more attention here again.”
Melbourne’s property market peaked in March 2022 and have since fallen by 8.2 per cent.
This is unlike Sydney, Brisbane, Perth and Adelaide.
They all peaked this year between February — when the Reserve Bank began increasing interest rates again — and May — when Labor’s Budget scrapped negative gearing for established homes from July next year and replaced the 50 per cent capital gains tax discount with a minimum 30 per cent tax and indexation for inflation.
First homebuyers also have more choice in Melbourne with the 5 per cent deposit scheme cap of $950,000 much closer to its mid-point house price of $906,067, which is significantly cheaper than Sydney ($1.438 million), Brisbane ($1.112m), Adelaide ($977,551) and Perth ($982,146), based on Cotality data.
The Reserve Bank on Tuesday last week hiked interest rates to an 18-year high of 4.85 per cent, adding to increases in February, March, May and September.
Victorian real estate agents have, since October 1, been required to publish reserve prices seven days before an auction, with penalties applying for those failing to comply.
