Melbourne’s property market heats up as buyers rush to secure homes ahead of a possible interest rate cut, pushing the clearance rate above 72 per cent.
Melbourne buyers and sellers are acting early ahead of Tuesday’s expected interest rate cut, fuelling fierce competition at the weekend’s auctions and pushing the city’s clearance rate to 72.5 per cent, according to PropTrack data from 374 reported results.
Property experts say the looming Reserve Bank decision is already influencing behaviour, with stronger bidding, more urgency, and sellers meeting the market to close deals before competition intensifies.
Ray White Victoria and Tasmania chief auctioneer Jeremy Tyrrell said buyer urgency was unmistakeable.
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“Listing now means you’re selling into a starved market,” Mr Tyrrell said.
“If a wave of properties hits after the cut, you’ll be just one of many options.
“That can flatten the urgency around your campaign.”
Ray White chief auctioneer Jeremy Tyrrell says active bidders have jumped 33 per cent, with sellers meeting the market to lock in deals before a potential rate cut.
Mr Tyrrell said sellers who priced realistically, based on comparable sales, were achieving standout results.
“The urgency is real,” he said.
“Buyers want to get deals done before the cut, anticipating more competition afterwards.”
Buyer’s advocate Cate Bakos warns a winter rate cut could fuel intense competition over limited stock, with interstate investors already outbidding locals.
Prominent Melbourne buyers advocate Cate Bakos said the benefit of a cut would be instant for pre-approved buyers and those with equity ready to spend, but slower for first-home buyers waiting on banks to recalculate borrowing limits.
“Winter is the worst time for a cut, it fuels competition over limited stock,” Ms Bakos said.
“Buyers know a rate cut increases their power, and many are acting before the herd arrives.”
Ms Bakos said interstate investors were already edging out locals in the sub-$800,000 range, often using equity from other properties to move quickly.
“Victorian investors have stepped back due to tax fatigue, but interstate investors see Melbourne as great value,” she said.
Mortgage Choice broker Rhys Elmi says a 0.25 per cent cut could save borrowers $100 a month and boost buying power by up to $30,000.
A 0.25 percentage point cut on a $500,000 loan could save about $1250 a year, while increasing borrowing capacity by $20,000-$30,000.
Ms Bakos tipped Melbourne as the “sleeping giant” of the property market after three relatively flat years, warning that sitting out in the hope of a price dip could backfire.
Mortgage Choice broker Rhys Elmi said a 0.25 percentage point cut would save buyers about $100 a month — or $1250 a year — on a $500,000 loan, and boost borrowing power by $20,000-$30,000.
“Once money becomes cheaper, more people jump in and competition rises,” Mr Elmi said.
“It’s generally smarter to buy beforehand.”
Mr Elmi said some lenders would pass the cut on immediately, while most big banks would take two to three weeks.
This Princes Hill terrace fetched $2.9 million under the hammer, one of the weekend’s biggest Melbourne auction results.
A modern family home in Doncaster East sold for $2.755 million, reflecting strong demand in Melbourne’s east ahead of a likely rate cut.
He expected a spike in refinancing and pre-approval applications if the RBA confirmed the cut.
Top sales this weekend included 514 Park St, Princes Hill ($2.9m), 12 Peppermint Crt, Doncaster East ($2.755m), 2/33 Pepperell Ave, Glen Waverley ($2.45m), 25 St Johns Ave, Camberwell ($2.225m) and 27 Orchard St, Brighton ($2.055m).
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