Revealed: Interest rate cut sparks Melbourne bidding wars as auction prices soar past reserves

Melbourne first-home buyers are driving intense battles at auctions.

Melbourne’s first-home buyers are back following the recent RBA cut — and they’re battling fiercely at auction, with some properties smashing reserves by nearly $100,000.

A three-bedroom home in Frankston sold for $945,000, well above its $880,000 reserve, after a young couple fought off three other first-home buyers in a heated bidding war.

The auction at 67 Raphael Cres opened at $790,000 before rapidly climbing as one buyer dropped out at $840,000 and another at $870,000, leaving two bidders to battle it out for the keys.

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Ray White Frankston’s Adam Price said the vendors — older investors selling their retirement asset — were blown away by the final result.

“They were hoping for around $880,000, with their dream price being $900,000 — so to exceed that by nearly $50,000 was an incredible outcome,” Mr Price said.

In Cheltenham, another first-home buyer couple landed a fully renovated villa at 2/24 Follett Rd, paying $862,000 —$82,000 above reserve.

A fully renovated Cheltenham villa sold for $862,000 —$82,000 over reserve — as buyers battled it out in front of a 66-strong crowd.

Cheltenham’s “Golden Triangle” proves hot property as first-home buyers push auction prices up following the RBA’s interest rate cut.

A 66-strong crowd gathered for the auction, where five active bidders drove up the price from an opening bid of $650,000.

Ray White Bayside’s Trevor Bowen said competition was intense, with the winning bidders having missed out on multiple homes before finally securing this one.

“The underbidder had also just lost out on the neighbouring property, so emotions were high,” Mr Bowen said.

This Frankston home sold for $945,000 —$65,000 above reserve — after a heated bidding war between first-home buyers.

A young couple secured this three-bedroom Frankston home after a fierce auction showdown, beating three other bidders.

The strong demand reflects a growing trend of first-home buyers scrambling to secure a property before potential interest rate cuts drive prices even higher.

Both agents say the shift in market sentiment is giving buyers more confidence, with clearance rates rising sharply since the first rate cut.

“In the first week after the cut, clearance rates hit 70 per cent, and last week they were sitting at 67 per cent,” Mr Bowen said.

Soaring auction prices and fierce bidding wars as first-home buyers scramble to secure a home before the market shifts.

The increase marks a sharp turnaround from the past two years, where rates fluctuated between 45 and 60 per cent as buyers held off due to affordability concerns.

But with interest rate cuts expected to boost property prices, Mr Price said first-home buyers were moving fast to avoid paying more next year.

“Sellers should capitalise on growing competition now, and buyers need to act quickly — or risk paying tens of thousands more in 2025,” he said.

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david.bonaddio@news.com.au

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