Labor’s landslide election victory has given Australia’s housing market a bounce ahead of an expected interest rate cut next week.
Auction clearance rates jumped to 70 per cent in the week following the election, according to initial figures from property data analyst Cotality, formerly CoreLogic.
That was a rise of 10 per cent compared with the clearance rate from the middle of last month.
READ MORE: Big four bank jumps the gun on RBA with fixed-term interest rate cut 11 days before official call
Experts forecast house prices will increase quicker than salaries through the remainder of this year.
Other analysis predicts them to keep rising into next year when the Labor government’s buyer assistance packages kick in.
Last week, 1784 capital city auctions were held, the highest number since the week prior to Easter.
Melbourne, where 830 homes went under the hammer, led the way with the Victorian capital recording a clearance rate of 73.2 per cent, slightly down the previous week’s 74.4 per cent.
Sydney last week returned a clearance rate of 67.7 per cent from its 665 auctions.
The Harbour City’s preliminary clearance rate has now held below the 70 per cent mark for eight consecutive weeks.
Mortgage holders may receive further relief next Tuesday when the Reserve Bank of Australia board sets the cash rate.
Economists are predicting a 25-basis-point cut to the current 4.1 per cent cash rate, but some haven’t ruled out the central bank’s board making a double-sized reduction, which would bring it down to 3.60 per cent.
In February, the RBA made the first official rate cut in almost five years, and markets are predicting at least three more this year, with underlying inflation having dipped into the bank’s target range for the first time since 2021.
The cheery outlook has also been bolstered by world financial markets welcoming talks between the US and China over Donald Trump’s tariffs.
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