Auction rates are on the rise, so your home loan costs might be too

By Evlin DuBose · · 2 min read
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Collage a man raising a hand at auction.

We may be in for a warm property winter. While still down significantly from the same time last year, CoreLogic reports property auctions have begun ticking up across the country, passing a 70% preliminary clearance rate for the second week in a row.

So what does this mean for sellers and buyers? And could a hotter housing market affect your home loan?

Are more buyers hitting the market?

Collage of a series of raised hands at an auction.

Auction rates have been trending up since the Reserve Bank announced its first pause of the rate cycle in April 2023. While sales stock remains relatively low compared to recent years, the number of successful auctions has received an enthusiastic bounce. This could indicate more homebuyers finally hitting the market after months of absence.

Indeed, Domain reports successful auctions in the last week where dozens of prospective buyers have shown up to bid on a multimillion-dollar home. 

“People are not paying prices based on value, they are paying prices on what it costs to exit the market and continue with their life,” Richardson & Wrench Marrickville sales agent, Aris Dendrinos, told Domain. 

“They just don’t have enough to look at, so people have to get creative and be more open-minded about where they’re wanting to go.”

RELATED: How to pay a housing deposit at auction

Over the last year, many homebuyers have been warded off by an unprecedented round of rate hikes to home loans, driving up the cost of monthly repayments by thousands of dollars. But with the central bank signalling a rate slowdown, those previously discouraged have sensed an opportunity to move in – though many first-home buyers are still priced out of the market. 

Indeed, a rate pause may make things worse for those already struggling to establish themselves. With stock levels so low, this sudden buyer scramble may drive up house prices in key suburbs across Australia, ballooning the amount needed for a housing deposit in a time of already sky-high interest rates. 

Sellers, on the other hand, may have an opportunity to part with their properties for a better price than they would have gotten just a few months ago. Homeowners may also experience an equity boost if their home value rises, but times are still somewhat volatile. 

“The market is out of control,” concludes Dendrinos. “I’ve [been selling residential real estate for 27 years] and I don’t know what anything is worth [right now].”

Need creative ways to buy a home? Here are three unconventional ways into the property market. Compare low-interest rate home loans below.

Home loan comparisons on Mozo

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Last updated 27 July 2024 Important disclosures and comparison rate warning*

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    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

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    6.16 % p.a.
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    $3,043
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    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

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    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

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    6.13 % p.a.
    Initial monthly repayment
    $3,027
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    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

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    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

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    • Owner Occupier
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    Initial monthly repayment
    $2,995
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    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

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    $2,995
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    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

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    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

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    6.11 % p.a.
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    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

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    • Owner Occupier
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    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

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    $3,043
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    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

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  • Fixed Rate

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    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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