Duncan Hughes from the Australian Financial Review expects this year’s auction season to kick off with strong demand expected for homes valued in excess of $5 million. He’s of the belief that competitive interest rates, easier lending terms, and improved sentiment will drive demand for these luxury homes.

The turnaround in property prices started after last year’s May federal election. The results of the election removed concerns about changes to negative gearing and at the same time, the Reserve Bank of Australia began cutting cash rates.

The Australian Finance Group says demand for their member’s services jumped 25% in New South Wales and 19% in Victoria in Q4 of last year. Auction clearance rates were significantly higher in the December quarter, despite rising auction volumes.

According to CoreLogic, Sydney and Melbourne were the best performers with clearance rates of 75 and 73% respectively. The auction season has just started and I’m looking forward to see the results.