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Strong February market ignores rate rise!
Over February’s first two weekends the Real Estate Institute of Victoria (REIV) recorded more than 1,053 auctions. 760 properties sold, 540 at auction, with 176 passed in. 220 properties were sold before auction with 0 properties selling after auction. The clearance rate averaged 81.50%. 823 homes were bought by private sale.
So far this month Melbourne buyers have not been put off by the February 3rd rate rise. A well known agency claims there has been an average of 3.4 registered bidders at auctions in February’s first two weeks, which is up on last year’s 3.1 figure for the same time.
How much extra will a loan cost?
Upping the cash rate to 3.85% on February 3 meant a household with an Australian average $694,000 home loan pays $4233 on the mortgage instead of $4337. That’s $1248 extra a year.
Affordable end of market going gangbusters
Demand is shooting up for more affordable properties as government incentives fire up the market.
The State government’s estimate on how first home buyers assistance measures will affect the market, was estimated at contributing a 0.5% rise. One things is certain though, there’s upward pressure on all quality entry level houses and units regardless of where they’re located.
PropTrack’s hottest 100 suburbs
PropTrack has put the following Melbourne suburbs in their 100 best Australian suburbs for growth through 2026. Werribee and Tarneit in the west. Oakleigh, Clyde North and Cranbourne to the south. East Lalor in the north. Footscray and West Brunswick closer to the city.
Hottest beachside suburbs – Willy and Port
PropTrack’s list of Australia’s 100 ‘best for growth’ beachside suburbs also includes Port Melbourne and Williamstown – based on all-round amenity, coupled with room for increasing gentrification.
7% value growth for Melbourne
Realestate.com.au predicts a 6 to 8% rise in values across 2026. This is similar to average growth, per annum, for the last 30 years. So this is like saying conditions will be roughly normal with steady growth, matching long term figures.
Values stall in January
Home values in Melbourne retreated 0.1% through January. But still rose 3.5% over the last 12 months. The current median home value (all dwellings) is $849,000.
What the banks are saying about more rate hikes
Three of the big banks, ANZ, Commonwealth and Westpac believe after the February 3rd rate hike the RBA will keep rates on hold for the rest of 2026. NAB however is predicting a second rate increase around mid-year (Cotality). So buyers would be prudent to factor another possible rate rise.
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