Last week the cash rate dipped below 4% for the first time since 2023. This means you can borrow more money today than any time over the last two years.
With a few more rate cuts ahead, your borrowing capacity will increase significantly.
Buyers tend to find out their max budget and spend the full whack.
Just like your ATAR score (it was ENTER score when I finished in ’03)… Who gets an ATAR score of 97.5 and only does a course that requires an ATAR of 65? No one!
Likewise, few people can borrow $1,500,000 but only choose to spend $850,000.
This is why house prices track very closely with interest rates.
The market is already gaining strength in anticipation of more rate cuts.
Melbourne has had four consecutive months of price growth, outstripping all other capital cities for the first time in yonks.
Jellis Craig’s clearance rate dipped this weekend to 74%, compared to 85% the week before, and a whopping 90% the week before that.
It’s not surprising though, given volume jumped from 78 to 88 to 118 sales over the past three Saturdays.
In Stonnington we had 100% clearance from our 10 auctions.
Deals have been flowing rapidly over the last two weeks.
Team Fetter/Sciola closed 11 sales in last 10 days including three before auction, four at auction, two private sales, and two off markets.
It feels like the strongest run we’ve had in a couple of years.
I wouldn’t say prices have taken off yet, but there’s some more urgency from buyers.
Sure, there are properties that are passing in and not selling. But they are now the exception, not the rule, like in 2024.
I will be surprised if we don’t see this market gain even more momentum in the coming months.
You can still buy a house in Armadale or Prahran for a similar price to eight or nine years ago.
House prices haven’t even kept up with inflation.
It is highly unlikely we will be saying the same thing in eight or nine years from now.
Not when Melbourne’s population is predicted to be over 7,000,000 by 2035.
Punitive taxes have skewed the supply and demand curves for Melbourne property over the last decade.
A recalibration is long overdue.
Rents have rocketed in recent years, and with capital growth on the horizon investors will flood back in. We’re seeing it already.
Four of those 10 team sales last week were to investors. Go figure.
Feature Property: 205 Gregory Street, Soldiers Hill
David Sciola 