Buyer Momentum Continues Despite Rate Hold and Rising Prices

Home buyers are continuing with property purchases despite interest rates remaining steady. Many are motivated to buy before prices rise further, although low listing volumes may restrict available supply. Auction clearance rates remain high across major cities, which indicates sustained demand even without a rate cut.

Australia's housing market is showing resilience in the face of ongoing policy uncertainty. The Reserve Bank’s decision to hold interest rates has not discouraged buyers, especially in capital cities such as Sydney and Melbourne. These buyers are not waiting for a future rate cut. They expect prices to increase soon and are acting now to get ahead of competition and limited inventory.

Early data reveals a national auction clearance rate of 72.2%, only slightly down from the previous week's 73.1%. Melbourne recorded the highest number of auctions with 630 homes listed. Sydney had fewer auctions but led the country in clearance rates at 76.2%, which equals its highest rate so far this year. Smaller cities, such as Adelaide, maintained strong results, with clearance rates rising to 75.6%.

Recent auction outcomes highlight strong buyer demand. Inner-city homes in both Melbourne and Sydney drew significant competition, often selling above reserve prices. Analysts report that many first-home buyers are especially active as they try to stay ahead of anticipated price increases. On the other hand, some sellers are choosing to wait, hoping for greater certainty in interest rate policy. This suggests that a rise in new listings could occur if rates start to fall.

Forecasts for the coming year indicate cautious optimism. Research firms project that home prices in Sydney and Melbourne could grow between 6% and 10% in 2025. While signs of a recovery are visible, experts caution that the current momentum has not yet led to rapid price surges.

Source: Australian Financial Review, Smart Mortgage Broking, Property Update

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