Home auctions boosted as falling mortgage costs encourage buyers

Falling interest rates are luring buyers back into the market, but first home buyers appear to be holding back at auction.

Changes to the state government's first home buyer's grant are expected to boost the low end of the market in the next six weeks.

While conditions were buoyant in Glenroy in the north where three of four properties sold before the scheduled auction date, Greensborough to the east posted a clearance rate of just two sales from seven auctions; in Epping only two out of five sold at auction; and in Bundoora, just one out of four. The weekend's 72 per cent auction clearance rate was recorded from the results of 653 auctions, slightly higher than the 69 per cent rate recorded over the past few weekends and better than the 61 per cent posted last year. The 58 outstanding results could bring the final rate down.

The higher volume of sales this year - 8434 auctions compared with 7980 last year - should deliver a much needed stamp duty bump to the state government's coffers. The Real Estate Institute of Victoria says the value of homes sold to date is just over $4 billion, about 38 per cent higher than the $2.9 billion sold last year at this time.