The clearance rate moved back into the 70%’s over the weekend with 546 auctions reported to the REIV. 316 properties sold at auction, 67 before auction and there were an additional 276 private sales.
All eyes will be on the Reserve Bank of Australia with their monthly meeting scheduled for tomorrow. Opinions are divided as to whether there will be a 0.25% or 0.5% rate rise tomorrow with some predicting the rise to be 0.5% tomorrow and then the rises scaling back. It seems we are already seeing some relief to cost of living with some prices coming back down on the supermarket shelves but unfortunately fuel excise will go back to normal rates at the end of the month which means we will be paying for more at the petrol pump. Any real impant of interest rate rises has a lagging affect and therefore, it is believed the RBA will take the foot off the pedal to monitor the overall impact in the months ahead.
The RBA cash rate is currently sitting at 1.85% which is still resulting in cheap money for homebuyers. Over the past few weeks, we have seen a significant positive shift in the confidence of buyers and as a company we have had an increase in new buyer enquiry and willingness to transact. Many buyers are factoring in these interest rate rises within their budgets and adjusting accordingly. Banks are also factoring higher interest rates in the amount they are prepared to lend property buyers.
Spring is gearing up to be an active few months with predictions of stock levels rising but also a rise in buyers in the market. There still could be a two speed market with A grade properties (properties with limited compromises) selling extremely well under strong competition and properties that have compromises (being unrenovated, poorly located and having inferior floor plans), having limited buyer interest.
The auctions we attended on the weekend were mostly competitive with one of them being 1/1 Bowen St, Malvern East. The single level, three bedroom, two bathroom, double garage modern townhouse was extremely popular with buyers and the agents were reporting large numbers through each of the open for inspection. The property was quoted at $1,000,000 to $1,100,000 prior to auction but mid campaign, due to the interest the price quote was increased to $1,100,000 to $1,200,000. 7 bidders in total with some not even getting the opportunity to put their hand up (buyers being a mixture of downsizers and young families) drove the price to $1,410,000 which was $310,000 over reserve. The closest comparable sale was $1,353,000 which was the rear townhouse which was identical in size and condition and that property sold in April 2022.
Have a great week.