Why Mid-Winter Auction Results in Victoria Should Have Buyers on High Alert – And What an Impending Rate Cut Might Do to Prices

As explained by David Dawn, Licensed Conveyancer at Victorian Property Settlements and long-time observer of the local market, there’s something quietly brewing under the surface of the Victorian property landscape. The latest auction figures show a market that’s far from frozen this winter. Instead, it’s ticking along with surprising resilience – and if you’re planning to buy in the next six months, you need to take serious note.

The data doesn’t lie: clearance rates and volumes are holding firm

Last weekend alone (ending 6 July 2025), Victoria recorded a clearance rate hovering around 73%, with more than 800 auctions scheduled. That’s not a sleepy winter market. In fact, these are mid-strength results by any historic measure, particularly given the sheer volume of auctions proceeding despite the season.

Drill deeper and it’s clear that vendor expectations are starting to stabilise. About 326 properties sold at auction, another 128 sold prior, and only 91 were formally passed in. What that tells us is that buyers are still out in force, and sellers are increasingly confident they’ll achieve decent prices without needing to retreat from the market or discount heavily.

Why that’s actually a red flag for future pricing pressure

For many, these figures might appear to be a good-news story: the market is balanced, there’s still opportunity, and no one needs to panic. But scratch the surface, and there’s a much bigger risk looming – particularly with the Reserve Bank of Australia widely expected to cut the official cash rate at least once before the end of the year.

When interest rates start to come down, borrowing power tends to climb rapidly. It’s not theoretical: even a 0.25% drop can mean tens of thousands more in maximum approved loan amounts for typical borrowers. Combine that with the pent-up demand already demonstrated by current clearance rates, and you have the perfect recipe for renewed upward pressure on prices.

This means that buyers who’ve been waiting for a “better deal” may actually find themselves squeezed even harder once the rate cut arrives. In other words: if you think property is expensive now, watch what happens when more buyers suddenly qualify for higher loans.

Vendors could be tempted to reset expectations higher

Vendors are also watching these numbers closely. Many are already recalibrating their reserve prices, quietly reversing the modest discounting we started seeing in late 2024. An environment with cheaper money and strong clearance rates could see sellers once again shooting for premium outcomes – meaning you’ll be competing not only with more cashed-up buyers, but with more ambitious price guides.

The risk of emotional overpaying returns

It’s also critical to understand the psychology at play. For the past 18 months, interest rate uncertainty kept many bidders cautious. Fear of higher repayments held a natural cap on emotional spending at auctions.

An official rate cut – even a modest one – changes that dynamic overnight. Buyers start factoring future cheaper repayments into their calculations. They bid harder, push past their earlier comfort zones, and once again we find ourselves with Saturday morning auctions that spiral tens or even hundreds of thousands above the reserve.

So what should you do if you’re buying now?

• Move quickly on due diligence. If you’ve found a property that fits your long-term needs, don’t wait for the RBA to officially move. You might be buying at the best relative moment.

• Insist on thorough contract reviews. Ensure your contract is rock solid, especially around finance approval timeframes and any special conditions. If market momentum increases, vendors may become less flexible on amendments or settlement timing.

• Be wary of Friday settlements. As we’ve written about extensively on our website, Friday settlements in a hot market are a recipe for stress. If anything goes wrong, you’ll be waiting all weekend.

• Set your ceiling – and stick to it. When auctions get emotional, clear pre-set limits are your best defence.

If you’re thinking of selling?

These numbers should give you confidence, but also a hint of caution. The expected rate cuts may embolden more sellers to come to market, increasing supply and diluting the buyer pool just as quickly. If your property is ready, it could be wise to get ahead of the crowd before the spring rush.

In summary: the warning is clear

Mid-winter results like these, combined with the looming prospect of cheaper borrowing, point to more competitive auctions and rising prices later this year. If you’re a buyer, don’t let the calm before the rate cut lull you into missing your window. If you’re a vendor, don’t assume that waiting will automatically translate into a price windfall.

As always, if you’d like independent advice on your contract, your settlement position or a pre-auction strategy, get in touch with our office.

Victorian Property Settlements – Trusted for over 25 years by Victorian buyers and sellers. Visit: www.victorianpropertysettlements.com.au