The latest rate cut from the Reserve Bank of Australia (RBA) has stimulated the housing market, with Cotality reporting the strongest national final auction clearance rate since February 2024.
Across the combined capital cities, 70.0% of homes taken to auction sold. This was the highest clearance rate since the week ending 11th February 2024 (70.3%).
Source: Cotality
Melbourne’s final clearance rate was 70.9% last week, up from 69.1% over the previous week. This marked the strongest clearance rate in five weeks.
Sydney’s clearance rate held above the 70.0% mark for the fourth consecutive week, coming in at 71.6%.
The following chart plots the monthly average final auction clearance rate against quarterly growth in dwelling values.
Based on historical correlations, the strong rise in clearance rates points to strengthening price growth.
Sydney’s housing market is looking especially bullish, given the surge in clearance rates:
The 28-day change in Cotality’s daily dwelling values index has recorded a solid lift in growth in Sydney and at the 5-city aggregate level, whereas Melbourne continues to lag.
Financial markets expect the RBA to deliver another 25 bp cut in November, with a further cut expected early next year.
Such rate cuts will add further stimulus to buyer demand and home prices, especially with the commencement of the Albanese government’s 5% deposit scheme for first home buyers in October.
