Melbourne’s property market has just had some fuel thrown onto the fire, with sales expected to spike with interest rates cut to a new record low.
The decision to cut rates by 25 basis points looks set to boost buying and selling activity and make things more competitive at weekend auctions.
Greville Pabst, from WBD Property Group, told The Age the rate cut should increase consumer confidence and ensure double-digit price growth for 2015.
“Melbourne is not yet a boom, but it is a very, very strong market, with clearance rates in the high-70s,” he said.
“It’s only going to put more fuel on the fire.”
“When you have clearance rates up around the 77 per cent to 78 per cent mark…you’re getting seven or eight bidders at auctions, and that has a tendency of driving price growth,” he said.
“So if this continues this year, we’re going to see in Melbourne house prices move another 10 per cent.”
Adding to the positive sentiment, Hocking Stuart Williamstown director Joanne Royston also spoke to The Age and said the interest rate cut could take Melbourne property to the next level.
“There is a huge shortage of properties, we just can’t get enough,” she said.
“Perhaps the additional confidence may encourage more sellers to put their properties on the market.”
Domain Group senior economist Andrew Wilson said Melbourne’s property market was being driven by the eastern suburbs, with the north-east and south-east also experiencing higher levels of activity.
“Auction clearance rates have been even stronger in the autumn period and this is set to continue, along with confidence,” he told The Age.