Cash rate cut another boost to Melbourne’s recovering market

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The Melbourne market continues to show signs of recovery.

Buyers are in the box seat after back-to-back interest rate cuts.

The historic low 1 per cent cash rate will inject buyer confidence into the market, experts say.

Income tax relief and the Australian Prudential Regulation Authority’s plan to loosen lending requirements will also help house hunters afford their search, CoreLogic analyst Kevin Brogan said.

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Auction clearance rates have been consistently strong. Picture: David Crosling

An Essendon house at 5 McCarron Parade was one of the top results under the hammer.

“I think we’ve already seen some confidence return … the auction clearance rate now performs at a level near 70 per cent week after week,” Mr Brogan said.

“There will be people entering the market now who found it difficult to meet APRA’s serviceability requirements before and those who had existing approval for loans may be able to extend their borrowing capacity a little more.”

He said Melbourne’s house and unit value rise of 0.2 per cent in June showed the market was already starting to improve. It was the first increase since November 2017.

Yesterday’s strong 72 per cent preliminary clearance rate was the seventh time in the past eight weeks it shot above 60 per cent, according to CoreLogic.

But there were only 350 properties that went to auction.

Real Estate Institute of Victoria senior vice president Leah Calnan said that property prices had rebounded and market sentiment had boosted, but stock levels remained a problem.

117a Roslyn St in Brighton sold for $2.5 million at auction.

National Property Buyers director Antony Bucello said some strong results under the hammer proved demand was out there.

“Vendors who have been sitting on their hands waiting for the market to pick up should now start to sit up and take note,” Mr Bucello said.

“Well located family homes in particular … will continue to see considerable demand.”

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