Melbourne’s auction market is heading for another significant test with more than 1200 homes slated to go under the hammer days before an interest rate call.
Melbourne’s auction market is heading to a major market test this week as it grapples with a Super Saturday sales event and the looming prospect of an interest-rate hike on Tuesday.
More than 1260 homes are scheduled to go under the hammer, following a subdued Anzac Day weekend last week when 240-odd live sales took place — and only 51 per cent sold.
But the clearance rate had been hovering in the mid to high 50s in prior weeks.
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Real Estate Institute of Victoria chief executive Toby Balazs said buyers would go back to having plenty of choice this weekend, but noted the latest inflation data had raised a real prospect interest rates could rise next Tuesday.
Mr Balazs said market confidence was already facing a number of challenges external to property sales at the moment, and this weekend would likely be an important indicator of how the rest of autumn would play out.
“This weekend should provide a broader indicate of where the market is at,” he said.
“And whilst there continues to be some broader economic challenges, we are still seeing broadly positive results across the state.”
REIV chief executive Toby Balazs says this weekend’s results should provide an indication of how the autumn market will wrap up.
Loan Market broker Jacob Decru said for many buyers a Reserve Bank call to raise rates could lead to one of two outcomes, a $20,000-$30,000 reduction in their borrowing capacity — if they were looking to borrow to their limit.
The second would see more buyers shopping around looking for another lender who might offer them more borrowing power.
“We’re finding there’s less inquiry, but the tyre kickers are gone — and those who are still here are very serious about buying; they want to get in,” Mr Decru said.
However, he noted that many believed Melbourne was transitioning to more of a buyers’ market and might consider waiting for a better price.
Ray White chief auctioneer Luke Banitsiotis said most homebuyers would have already factored in another rate rise in their mind, and the prospect was unlikely to slow them down at auctions.
“So, for sellers, if you are positioned well and your agent has done their job, there’s no reason you won’t sell in this market,” Mr Banitsiotis said.
“But you must pay attention to their advice. There’s still people out there looking to buy, it’s just where the owner meets the market.”
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