Our Market - February 2025
Real Estate Monthly Report - February 2025
The real estate market in February 2025 was met with an encouraging shift as buyers responded positively to the Reserve Bank of Australia's (RBA) long-awaited rate cut. The RBA reduced the cash rate by 0.25%, bringing it down to 4.1%. This cut is a much-needed relief for mortgage holders, offering some respite from the mortgage stress that has weighed heavily on many homeowners.
While this rate cut provides some financial breathing room, mortgage holders will be hoping for additional cuts soon. However, the RBA appears to be taking a cautious stance on future rate cuts which leaves many wondering if more relief will be on the horizon. For now, though, February’s cut marks a step in the right direction, and many are hopeful that it will set the stage for a more stable market moving forward.
Our local Market Performance - February 2025
Looking at the local real estate market, here is a snapshot of performance for February, compared to the same time last year:
• Sold at Auction: 39 (54)
• Sold Prior to Auction: 45 (41)
• Passed in at Auction: 11 (17)
• Withdrawn from Auction: 19 (9)
• Auction Clearance Rate: 75% (78%)
• Sold by Private Treaty: 34 (22)
These figures show some fluctuation in auction sales and clearance rates compared to February 2024. While auction clearance rates have remained relatively high at 75%, down from last year’s 78%, the number of withdrawals from auctions has increased, suggesting a sense of uncertainty in the market. Despite this, the number of private treaty sales has risen substantially, with 34 properties sold, up from just 22 at the same time last year.
What Does This Mean for the Local Real Estate Market?
So, what does all this mean for the local real estate market? We expect that the rate cut will provide some renewed confidence to buyers. While it's a positive sign, to see a significant shift in buyer sentiment, further cuts are likely needed. However, there is certainly a sense of optimism in the market, and a glimpse of light at the end of the tunnel for many.
2025 Market Performance vs. 2024's Final Quarter
Looking at the broader picture, 2025 is off to a much stronger start compared to how the market ended in 2024. The final quarter of last year brought some of the toughest conditions we’ve seen in a long time. During this period, we saw a mass exodus of buyers, resulting in significantly lower demand. Open homes were poorly attended, and properties struggled to attract interest, with many only seeing a handful of potential buyers at inspections.
Fast forward to 2025, and the market is showing a remarkable turnaround. Buyers have returned in droves, and open homes are seeing impressive attendance numbers, with groups of 20 to 30 buyers at half-hour inspections. It’s clear that optimism is beginning to build, and there is a renewed sense of energy in the market.
Buyer Sentiment and Caution Moving Forward
While buyer numbers are strong, there is still some hesitation among potential purchasers. The strong foot traffic at open homes has not necessarily translated into a large number of registered bidders at auctions. This suggests that although interest is high, some buyers are still holding back, perhaps waiting for more price clarity or further rate cuts.
For buyers who are still on the fence, my recommendation is to act sooner rather than later. The risk of waiting too long is that more buyers will become active in the market, increasing competition and driving prices higher. This is a trend we have seen many times in the past, and it could easily happen again.
Auction Clearance Rates: A Key Indicator of Market Recovery
Auction clearance rates are always a key indicator of the market’s health. In the last quarter of 2024, we saw clearance rates dip to around 65%, a significant drop from the earlier part of the year when the rate hovered around 75%. However, in February 2025, the auction clearance rate rebounded back to 75%, a clear sign that buyer interest is increasing, and market conditions are improving. This uptick in auction clearance rates is a strong reflection of the growing buyer confidence, which we attribute to the return of buyers to the market and the impact of the recent rate cut.
In Summary
The early signs of 2025 show positive momentum in the real estate market. Buyer numbers are on the rise, and market conditions are more favourable than they were just a few months ago. For sellers, this presents an excellent opportunity to enter the market, as there are plenty of buyers out there. For buyers who are still sitting on the fence, it's important to remember that hesitation could cost you in the long run as competition heats up and prices rise. The market is showing signs of recovery, and it could be the right time to make a move before conditions shift again. In conclusion, while we’re not yet out of the woods, the outlook for 2025 is optimistic, and both buyers and sellers can find opportunities in the current environment. The key will be to stay informed, act strategically, and be ready for whatever comes next.