Real estate agents had hoped the Melbourne Cup Day rate cut would jolt a lifeless market into action. But despite healthy crowds, the city's auction market remains largely a spectator-only affair with about half of all homes being put to auction failing to sell under the hammer.
The Real Estate Institute of Victoria posted an initial clearance rate of 52 per cent yesterday. That is likely to fall throughout the week as the REIV chases down the results of about 70 auctions not yet lodged by agents. Last weekend the clearance rate came in at 50 per cent - the lowest rate in seven years. Wakelin Property Advisory director Richard Wakelin said the rate cut was "too little too late" to rally this year's market.
"Buyer confidence has been severely dented," he said.
"The cut is too little too late for this year, but buyers will be breathing easier going into next year."
Melbourne's property market will come under further stress next weekend when a hefty 870 properties are auctioned.
Stock levels are already at record highs with about 51,000 properties for sale in Melbourne, up by more than 40 per cent on this time last year, according to property data firm SQM Research. The city's median house price has shed $50,000 over the past 10 months, falling from a December high of $601,000 to sit at $551,000.
REIV spokesman Robert Larocca welcomed Tuesday's rate cut, but said any positive movement in the market would not emerge until next year.
"The market is affected by the performance of the broader economy and the outlook - a key factor behind the RBA decision - is worse than it was a year ago," Mr Larocca said.
Barry Plant director Mike McCarthy said inquiries, particularly from first-home buyers, had picked up.
Bucking the doom and gloom, St Kilda East residents Andrew and Lindy Lloyd outbid two rivals to buy a three-bedroom, one-bathroom house in Trenoweth St, Brunswick West, for $844,000.
"We've been looking for a year and we want to live in the north so we are really happy," Mr Lloyd said.