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Auction clearance rates across the country’s capitals over the last week rose to 75 per cent, the highest since the first week of April 2024.
Both Sydney and Melbourne saw a 29.5 per cent increase in the number of auctions held over the week, a total of 720 and 961, respectively.
Brisbane also reported an increase in volumes of 10.5 per cent, with 137 in total, as reported by Cotality.
These figures are only expected to increase in the coming weeks, with 2,100 homes slated for auction, the first time the volume of capital city auctions has climbed over 2,000 since the last week of June.
This increased activity has been attributed to the August interest rate cut. The RBA reduced the rate by 25 basis points, bringing the cash rate to 3.60 per cent.
Lenders across the board implemented the 0.25 per cent reduction immediately following the cut, providing some much-needed relief and optimism for borrowers.
Now leveraging some extra borrowing power, there is an influx of potential home owners seeking the expertise of a broker to facilitate their purchase.
Home Loan Experts’ brokers have already experienced increased demand from borrowers.
“We are seeing a surge in activity of people wanting to get pre approvals or to release equity, the market is heating up and people are trying to get ahead of what may be potentially upcoming,” said senior mortgage broker Jonathan Preston.
Prakash Rai said the fear of missing out (FOMO) is driving higher bids from buyers.
Meanwhile, seasoned investors are leveraging increased borrowing capacity to further build portfolios.
Adding some strain, said Rai, is many sellers holding onto property. This is creating a supply challenge for borrowers and helping push prices up. He said the time to buy is now and to “grab anything you can find, rather than waiting for the ideal property.”
Broker Siddhartha Bajracharya said these trends are unsurprising following the rate cut and expects property prices to increase as competition heats up. This will only get worse as further rate cuts are passed down.
He urged first home buyers to take advantage of government schemes and incentives to help them enter the market and relieve some of the cost pressures.
“If they wait until January for the increase in the property price caps, the price may have exceeded the new caps by then. Even if the property price [is] above scheme, they should really start to explore if they [are] eligible to buy by paying lower LMI costs,” said Bajracharya.
[Related: How a rate cut would impact the property market]
