There were 512 auctions reported on the weekend to the REIV producing a clearance rate of 69% yet again. 287 sold at auction, 66 before auction and 158 properties passed in. There were an additional 168 private sales.
The Reserve Bank of Australia met last week and increased the cash rate to 2.6 per cent. The increase of 25 basis points was lower than the 50 basis points that was widely predicted. Whilst this hasn’t stopped many buyers from being cautious, the rate increase slow down has given some buyers confidence that Spring might be the time to buy. The REIV auction clearance rate is still remaining steady in the high 60%’s and whilst stock levels are predicted to rise, it is unlikely to be a highly active Spring season that we had seen in pre-Covid years.
At Elite, we noticed a difference between our new buyer enquiry levels from the 0.5% rate rise in September to the 0.25% rate rise in October. Last week, after the cash rate announcement, our phones were busy with buyers ready to transact in Spring. Three of the four big banks have also adjusted their interest rate predictions with ANZ predicting a peak of 3.6% in May, Westpac predicting a peak of 3.6% in March, NAB predicting 3.1% in February and CBA predicting 2.85% in November this year. Whilst these are only predictions, the good news is that we may be only upto 1% away from interest rate stability, and to levels that are more the norm. Certainly no one is anticipating we will have interest rates as low as what we have had over the past two years again, and buyers are starting to regain confidence around that.
The market is not allowing vendors to be greedy, but ones who are realistic in price are mostly selling. Auctions we attended were mostly selling close to the reserve with fewer runaway results. 1 Cherbourg Avenue, Beaumaris went under the hammer which is a three bedroom, two bathroom unrenovated home in the Beaumaris Secondary College zone which is very highly sought after. Land size is 593 sqm. The property was quoted $1,600,000 to $1,650,000 prior to auction and sold for $1,707,000 with the auction attracting four bidders. $40,000 above the reserve price.
Have a great week.