Melbourne Auction Results – August 10, 2013
By Peter Sarmas on 12 Aug 2013
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Property Market News
Reserve Bank Cuts Rates by 0.25 per cent to a 59 year low
Last week’s Reserve Bank announcement to cut cash rates by a further 0.25 per cent sparked rate cuts from banks and lenders around the nation. This means cash rates are now at the 59 year low of 2.5 per cent.
Most banks moved quickly to pass on the rate, though Westpac went above and beyond by cutting 0.28 per cent from its variable mortgage rate. As a result, mortgage borrowers will see lending rates under 5 per cent for the very first time. A number of online lenders are also offering sub
4.5 per cent rates.
Melbourne Weekend Auction Results
On the Melbourne auction front, the Real Estate Institute of Victoria (REIV) recorded the clearance rate at 76 per cent on the 522 properties that went to auction on Saturday.
It’s important to note that not all properties set for auction are being reported to the REIV, which does skew the figures slightly higher. Nonetheless, this has always been factor in the way clearance rates have been measured by the REIV and this figure is seen as a barometer for the Melbourne property market, so we will continue to use it as a reference.
Looking Forward
This weekend a high volume of properties went to auction, particularly in the inner city, with good results. RP Data report that property prices for the year around the nation are up 5 per cent and they expect further rises next year. Interestingly, Property Valuers Herron Todd White see the Melbourne property market in the “start of recovery phase“, which is good news. In line with this, the Reserve Bank’s Governor Stevens is also looking to stimulate the property market by reducing interest rates to increase property prices and fuel consumer spending through what’s known as the “wealth effect”.
As far as auctions go, most of the activity over the weekend was in the east. The outer east was the most active and had the highest clearance rates for houses, while the inner south had both good volumes and clearance rates for units.
How Will the Federal Election Impact Property Prices?
The September 7 election appears to have put the brakes on those vendors thinking of putting their property on the market. We would expect the latest interest rate cut coupled with low stock levels will keep prices stable, while good properties should see competitive bidding. Come October however, we see a flood of properties and new buyers becoming active, as first home buyers and investors look to capitalise on the expected upswing in the Melbourne market.
