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A real estate veteran anticipates a significant increase in buyer activity, driven by a surge in auctions, favourable Home Value Index data, and the recent interest rate cut.
McGrath Estate Agents CEO, John McGrath, has been analysing the latest market trends and predicts a surge in buyer activity in the coming weeks, based on the latest CoreLogic Home Value Index and auction report.
According to the data, the autumn auction season has been gaining momentum, with over 2,500 homes auctioned weekly nationwide, while CoreLogic’s early indicators suggest a robust market, with the national clearance rate hovering around 65 per cent in February.
“That’s about the level we saw in early spring last year before the market began to cool off,” McGrath remarked.
He said that higher auction volumes expected in March may test this strength.
The recent 0.25 per cent rate cut from the Reserve Bank of Australia (RBA) is also expected to bolster market sentiment and potentially encourage greater buyer activity.
McGrath said that despite last month’s cut being the first since November 2020, Australians should remain budget-conscious.
“A 0.25 per cent cut will not make a material difference to household budgets, nor buyers’ ability to secure enough finance to buy a home affordably,” he said.
Nonetheless, McGrath said the move indicates the beginning of a downward trend in interest rates, which will depend on falling inflation levels.
Following the market trends, McGrath predicted a rise in buyer activity, with a more noticeable boost after two to three additional rate cuts.
“I’m expecting a spike in buyer activity following this first cut and a more meaningful increase once we’ve seen three or four rate reductions,” he said.
McGrath urged buyers to evaluate their budgets cautiously, as RBA governor Michele Bullock warned that three more rate cuts by mid-2026 may be overly optimistic.
“It’s important to only buy at a price level that you find comfortable to manage over the long term,” McGrath said.
Data from CoreLogic revealed that home values declined by 1.4 per cent in Sydney, 2 per cent in Melbourne, 0.8 per cent in Hobart, and 0.5 per cent in Canberra between 1 November and 31 January.
With prices softening in these key markets, McGrath suggested the current autumn season could provide a strategic opportunity for buyers to enter the market before further rate cuts occur.
“More rate cuts – whenever they come – are likely to push up home values,” he said.
CoreLogic research indicated that for every 1 per cent reduction in the cash rate, dwelling values typically rise by an average of 6.1 per cent.
“Some markets are more responsive to rate cuts, with the research showing that popular family suburbs with higher median values tend to get a greater price uplift as rates go down,” McGrath said.
In Sydney, a 1 per cent rate cut historically resulted in median house prices surging 19 per cent in Leichhardt and the Sutherland-Menai-Heathcote area, 18 per cent in Warringah, and 17 per cent in Parramatta.
Melbourne historically saw similar trends, with median prices climbing 18 per cent in Whitehorse-West and Essendon, and 17 per cent in Manningham-West and Boroondara.
The data also showed a notable increase in median house prices in Brisbane, with areas such as Sunnybank, Nathan and the inner-north reporting a 5 per cent rise.
Furthermore, CoreLogic reported a surge in property values in Hobart, with inner-city median house prices climbing 6.5 per cent and 5 per cent in the north-eastern region of the city.
Similarly, regional markets have been thriving.
Wollongong led the charge with a 12 per cent jump in median house prices, while the Kempsey-Nambucca region nearly hit the 10 per cent mark.
The Gold Coast hinterland and Newcastle both saw an increase of 6.5 per cent, and Tasmania’s south-east coast noted a respectable 6 per cent rise in median house prices.
McGrath said the CoreLogic data pointed out that median values in many of these suburbs are currently well below their peaks.
“Families seeking forever homes in these popular areas may be smart to buy this autumn before a rate-inspired price upswing begins,” he said.
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