Powell said almost two in five of Sydney’s September auctions sold prior, the highest level since October 2021, showing the market is heating up, but the level of prior sales was not as strong in Melbourne.
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She thought three interest rate cuts this year made buyers feel a sense of urgency to get a deal done before prices rise further.
“Improved borrowing power is definitely driving some to make faster decisions, particularly when you’ve got momentum building in a market,” she said.
“I’m not expecting boom-time scenarios in terms of price growth but a buyer will be mindful prices are rising.”
Auctioneer Clarence White of Menck White said most homes were selling and Sydney’s clearance rate of 71.2 per cent looked “not bad on paper” but did not tell the whole story.
“I think there is still a lingering price caution with buyers and buyers are still approaching auctions with a tentative approach, wanting to bid in small increments … sometimes showing reluctance to bid,” he said.
Homes are selling but buyers are price-sensitive.Credit: Sitthixay Ditthavong
“If you misprice a home in the current market, you get the price guide too high, you just won’t get any traction.
“The buyer of today is a very value-conscious buyer – they’re not buying it at any price.”
He thought buyers had become more confident with each rate cut, but as economists warn there may not be any more rate cuts this year, and more homes are listed for sale this spring, he thought the extra supply may have a moderating effect on competition.
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“Things are going to be fine. It’s going to sell – it’s just not going to be explosive.”
Top-end Melbourne buyer’s agent Emma Bloom, of Morrell and Koren, said the hope of a more buoyant spring market was concentrated in the sub-$2 million category, not among prestige homes.
“It’s really not happening at the top end,” she said. “They’re all expressions of interest [campaigns], and that’s because agents are protecting the value of properties given that there’s usually one [bidder] or none, and they’re not the ingredients for a competitive auction scenario.”
She said it was different at the lower end of the market, where homes were transacting, although she did not know how many were runaway results.
LJ Hooker Group head of research Mathew Tiller said the expanded Australian government’s 5% deposit scheme from the start of October would add to the buyer demand that had already increased due to rate cuts.
“Lower interest rates, better mortgage serviceability, higher borrowing capacity and now the first home buyer guarantee scheme coming in – it’s just all building demand,” he said.
“We’ve seen both attendance at open homes and on auction day being quite elevated through the past couple of months.
“I think it’s still going to be a pretty active and competitive spring for auctions. We are seeing the number of auctions begin to rise and the number of listings begin to rise but definitely nowhere above the level of demand.”