RBA Rate Cut Revives Market, Clearance Rate Hits 16-Month High — Sydney Auction Clearance at 77%

Week’s Key Focus

The Australian Financial Review reported that the Reserve Bank’s rate cut this week has significantly boosted market confidence, with the national clearance rate jumping to 75%, the highest since April last year. Sydney and Melbourne led the surge, recording clearance rates of 75% and 75.5% respectively, as agents noted a strong return of buyer enthusiasm. Domain’s chief of research, Nicola Powell, said the cut has made buyers more active, intensifying competition at auctions and driving up sales.

Over the past week, auction listings nationwide jumped 24.3%, marking the highest sales volume in seven weeks. Powell noted that while economists generally expect house prices to continue rising modestly, limited affordability will prevent a sharp upswing. However, she added that three consecutive rate cuts have been enough to draw hesitant buyers back into the market, with spring trading likely to remain strong. Canstar estimated that the cut could increase the borrowing capacity of a single income earner by about $12,000, while a dual-income couple could borrow around $24,000 more.

The impact is already evident on the ground. In Melbourne’s Cheltenham, a two-bedroom home sold for $551,000, well above its $460,000 reserve, after attracting five first-home buyers in fierce competition. In Sydney’s Pennant Hills, a four-bedroom original house built in 1973 sold for $2.35 million, also to a first-home buyer couple. Buyer’s agent David Morrell said signs of recovery are emerging in the off-market sector, noting that while the high-end market remains sluggish, there are early signs of improvement.

Other capitals also performed strongly. Brisbane’s clearance rate rose to 69.6%, reflecting a slower response to the cut; Adelaide reached 78%, its third-highest this year; while the ACT recorded the strongest performance, with a clearance rate of 80.6%. Analysts expect the lift in borrowing capacity from the RBA’s move will inject further momentum into the spring selling season, particularly benefiting first-home buyers.

Auction Results Last Week

Sydney: 837 properties were scheduled for auction, with 508 results reported and 390 sold, delivering a clearance rate of 77%. The total auction value reached $460,231,288, and the median house price was $1,597,500.
Melbourne: 873 properties were scheduled for auction, with 647 results reported and 469 sold, resulting in a clearance rate of 72%. The total auction value came to $379,088,526, and the median house price was $1,010,000.