Home buying picks up at auction: Are we headed toward a busy Easter property season?

Key points of this story:

• The Aussie property market appears to be picking up ahead of Easter.
• The national auction clearance rate jumped to 76% on the weekend of 10 February. 
• The median price is still high in Sydney ($1.5m), though is lower in Melbourne ($1m).
• Some Variable home loan rates are holding at around 6 - 6.50% and might drop in 2024.
• Home loan comparison is crucial to a successful home buying strategy. 

Home auction clearance rates are ticking up and as we approach Easter, that might mean the property market is about ready to hatch.

We can gauge buyer interest fairly well by observing weekly auction clearance rates, and this past weekend the national clearance jumped to 76%, up from last week’s 74%, according to CoreLogic.

It’s a small rise but city-based figures reveal a bit more. Australia’s largest market, Sydney, has notably ramped up - the clearance rate in the city hit 72% on 10 February, where 407 sales were made on 568 reported auctions, says Domain. At the same time a year ago, the clearance rate was just 68%. Perhaps even more telling is Sydney’s median price, which remains quite high at $1.5m.

So while it might shape up as a sweet time for sellers, how might buyers fare?

Sydney and Melbourne property price points

Of course the median is the middle, so in the mix of Sydney sales you can expect some rather high prices, including a three bedroom house in Caringbah South that recently sold for $2.37m and a four bedroom house that sold in Gordon for $3.45m, as per Domain.

That’s the upper end. There were also more reasonable price tags: a two-bedroom unit in very centrally located Neutral Bay sold for $765,000, while a three bedroom unit in Rockdale sold for $850,000 - both seemingly good prices in this high demand market. 

Melbourne was similar, climbing to a 64% clearance rate last weekend, after posting just 61% at the same time a year ago. The median there was a more modest $915,000, perhaps presenting a good opportunity for younger buyers to break into the market.

Just as an example, a two bedroom townhouse in popular Footscray sold for $740,000, while a three bedroom house in Malvern East, just a two minute drive from Chadstone Shopping Centre, went for $1m.

What does this all mean? Momentum in the home buying market

The real estate year started slowly as might be expected, with the time it takes to sell a home slowing at the end of 2023 and into January - there were just fewer people looking to buy. However, February has seen a rise in activity, with the combined capitals clearance rate shifting significantly higher compared to the final weeks of 2023, when the clearance rate fell below 60%.

This week past hit their highest auction clearance level in over 18 months nationally and the highest in Sydney in over two years, as per CoreLogic. And this trend started in the first week of February, so there’s clearly a stirring interest among buyers as the year progresses.

How does more activity affect your home loan?

Ultimately this means prospective home buyers need to start researching both their suburbs of interest and potential home loans. 

The first thing to compare is home loan interest rates because whether you’re looking at a house that’s over $1m or a unit that comes in at $750,000, you will likely need to borrow a fair chunk of the price. 

For example, a standard loan-to-value ratio of 80% will require you put down a 20% deposit and to borrow the remaining 80% of the property’s value. So, that would mean $200,000 down payment on a $1m property, borrowing $800,000 to be repaid with interest. 

Comparing home loan rates to reduce your costs

You can see with figures like these that the interest rate you get matters greatly, even if it is a variable rate that can come down over the course of 2024. 

Right now the average variable home loan rate is 6.85% in the Mozo database, but some sound research could see you secure a variable rate that’s notably lower. For instance, Up’s Home Variable Rate loan offers 6.15% (6.15% comparison) at the time of writing, Ubank’s Neat Home Loan offers 6.09% (6.11% comparison) and Unloan has a 5.99% (5.90% comparison) rate.

It’s worth checking the cost of your home loan repayments based on these different interest rates, no matter which property you’re eyeing off. Our home loan calculator might help.

Otherwise, start with a simple side by side comparison below, where we have listed some of the top home loans on the market as chosen by our Mozo experts.