Auction jump ahead of expected Cup Day rate hike
THERE’S been a jump in auctions along the east coast as sellers try to offload properties ahead of an expected interest rate hike on Melbourne Cup Day.
Some 2883 properties were listed for auction last and an additional 639 are set to go under the hammer in the following days, which would make it the busiest period since April 2022, according to CoreLogic.
That’s 80 per cent spike on this time last year but still below record auction volumes in late 2021.
Melbourne was hosting the most with 1746 properties listed, followed by Sydney with 1179, Brisbane 241 and Canberra 165.
Auctions in Adelaide are up marginally with 174 scheduled, while Perth has fewer than last week and just three properties are set to be auctioned in Tasmania.
It comes as mortgage owners face what could be the first interest rate hike since June.
RBA governor Michelle Bullock said the board won’t hesitate to act on interest rates if necessary.
Inflation data released last week showed consumer prices tracked by the Australian Bureau of Statistics rose 1.2 per cent over the three months to September and annual inflation grew 5.4 per cent.
Reserve Bank Governor Michele Bullock revealed the consumer price index results came in a little higher than forecast and service prices remained higher than she was comfortable with.
The Reserve Bank next meets on 7 November, Melbourne Cup Day, and Ms Bullock has made it clear the board will not hesitate to act on interest rates if it deems it necessary.
Real Estate Institute of Australia president Hayden Groves said some vendors had dragged auctions forward to beat the expected rate rise on Tuesday after months on hold.
“Sellers will be trying to beat that because we do see needs shift once we do start to see rates rise again,” he said.
“People think that perhaps that might be the beginning of the end of a buoyant market.”
He said it was still a seller’s market in most jurisdictions with family homes in highest demand.
“People will be certainly thinking of selling now and taking profits, perhaps downsizing.”
Mr Groves said it’s still a sellers’ market in most jurisdictions.
The RBA estimates roughly five per cent of all variable-rate borrowers are paying more for essentials and housing than they are bringing in.
This increased to one quarter of highly leveraged borrowers with loans at least four times their income.
Central bank research also showed while tenants have been under pressure, spare cash flow that group’s overall cash flow jumped as higher cost of living and rising rest had been offset by higher incomes linked to the tighter labour market.
– RACHAEL WARD/ AAP