Melbourne Market Momentum Builds as Confidence Returns

Melbourne’s property market is hitting its stride.

Auction clearance rates are pushing above 70%, buyer confidence is strengthening, and interest rate cuts have given the market fresh energy.

As we head into spring, Woodards’ agents are reporting increasingly solid conditions, with sellers well-placed to take advantage of rising buyer competition and demand.

Confidence surges to multi-year highs
Home buyer sentiment is at its highest level in more than four years, according to the latest Westpac–Melbourne Institute Consumer Sentiment Index.

The index, which tracks consumers’ views on whether it is a good time to buy a dwelling, rose 10.5% in August to 97.8, which is 37% higher than the same time last year.

The research, based on a survey of 1,200 adults between August 11-15, shows sentiment has lifted on the back of the Reserve Bank of Australia’s (RBA) third rate cut of the year.

With lower mortgage rates boosting household finances, confidence among home buyers and mortgage holders has strengthened considerably.

Consumers also remain optimistic on prices.

The Westpac–Melbourne Institute Index of House Price Expectations edged up 0.9% in August to 164.2.

This is the second-highest reading since December 2013 and not far off the record 166.5 reached in June this year.

Three-quarters of Australians expect prices to rise over the next 12 months.

Overall consumer sentiment also lifted to its highest level in three and a half years, rising 5.7% in August to 98.5, from 93.1 in June.

That means the index is just 1.6% away from being back in net positive territory.

Rate cuts fueling recovery

One of the key reasons for this shift is the RBA’s decision to cut interest rates three times this year, in February, May and August.

Each cut was 25 basis points, bringing the cash rate down from 4.35% at the start of 2025 to its current 3.6%.

Lower borrowing costs don’t just help buyers with affordability, they also give sellers greater confidence to list their properties, knowing demand is strengthening.

For much of 2024, many vendors sat on the sidelines, but with confidence rebounding and finance more accessible, I expect that will translate into a strong spring selling season this year.

Clearance rates push higher

The auction market has been one of the clearest indicators of renewed momentum.

The weekend immediately after the RBA’s August rate cut saw 985 auctions in Melbourne, with a clearance rate of 70.9%, which was the strongest in five weeks.

That compares to 69.1% the previous weekend and just 61.7% at the same time last year.

Earlier in the year, we also saw the positive effects of rate cuts feeding through.

In May, following the RBA’s second cut, Melbourne hosted 1,223 auctions, with clearance rates holding at 66%.

Back in February, the city saw its busiest auction week since October 2024, with 1,437 properties under the hammer and clearance rates lifting to 64.5%.

The progression is clear: from clearance rates in the high 50s and low 60s at the end of last year, to 70% and above today.

Buyers are once again competing with confidence, and that is creating excellent conditions for vendors.

A positive outlook for spring

With stronger clearance rates, improved affordability through lower interest rates, and consumer sentiment at its highest level in years, the Melbourne market is entering spring in a position of strength.

Buyers are back, confidence is building, and competition is heating up.

For anyone considering selling, this spring looks like the most favourable environment we’ve seen in a while.

The Woodards team is here to help you make the most of these conditions and guide you towards the best possible result.