Rate cut predictions can’t spark property sector

Despite widespread predictions of a cut in interest rates in the first week of September, property buyers are jittery about re-entering the market and opening their wallets.

Despite widespread predictions of a cut in interest rates in the first week of September, property buyers are jittery about re-entering the market and opening their wallets.

While some real estate agents reported better crowds at auctions and open for inspections, and a general increase in the amount of interest from buyers, auction clearance rates remained stubbornly low.

As well as waiting for rates to actually fall, it appears buyers may be holding off in the hope that property prices will fall further as has been widely predicted.

In Melbourne, the clearance rate fell to 61%, compared with 63% last weekend and 79% this time last year. “This showed, once again, that the housing market is performing in line with the wider economy,” the chief executive of the Real Estate Institute of Victoria, Enzo Raimondo, said. “An interest rate cut would be welcomed by all.”

In Sydney, the clearance rate fell from 63% to 52%, with conditions remaining particularly tough in the city’s outer suburbs.

In Brisbane, the clearance rate plunged from 40% to 25% on low sales volume. The clearance rate in Adelaide jumped from 52% to 57%, although it should be noted only 20 houses were up for auction.

Related stories:

• Rates almost certain to fall in September