Low stock levels and a rise in home buyer appetite, supported by low interest rates, have spurred competition for quality homes, which may increase now the uncertainty of the election date has been erased.

Financial markets are pricing in a 91 per cent chance of a rate cut on Tuesday, The odds increased after Reserve Bank of Australia governor Glenn Stevens said last week there was “scope” to keep cutting rates given weakness in the domestic economy. In Sydney, homes priced under $1 million are drawing hundreds to open for inspections, and multiple bidders at auctions. An unrenovated Matraville house sold for $996,000 after eight bidders took the price $30,000 above reserve on Saturday. Ray White agent Joe Khederan said more thanl00 people viewed the house, which sold for the first time in 40 years.

Sydney’s clearance rate was above 80 per cent for the fourth consecutive week at 81 per cent, according to Australian Property Monitors, compared with 65 per dent for the same weekend last year. The top seller was a Wahroonga home at $2.58 million. Melbourne’s rate was 74 per cent, according to the Real Estate Institute of Victoria.

The highest sale was $2.8 million for a Balwyn North property. Melbourne buyers advocate Mal James said sales were quiet in the million-dollar-plus market but demand was high.

“The quality of properties on offer was generally fairly average but the results demonstrate that buyers are prepared to pay good money even for homes that may need quite a bit of work or are compromised in other ways,” Mr James said. “When less than A-grade properties are selling well and with competition, that’s when you know you’re in a rising market.”

The 65.5-hectare property of five time MotoGP world champion Mick Doohan, in the Tallebudgera Valley south of the Gold Coast was passed in at auction on Sunday,

McGrath agent James Ledgerwood said there bad been interstate and offshore interest but the property was passed in on a vendor bid of $1 million, it now has a $1.375 million price lag.

In Brisbane, 61 houses were scheduled for auction and the top seller was a Forest Lake home at $2.58 million. Shayne Harris of Savills Residential Sydney said uncertainty around the election had put a brake on the property market with sellers taking a “wait and see” approach, which would ease now the September 7 date had been set. “Buyers, on the other hand, are having to compete for low levels of stock, especially for properties up to $1.5 million:’ he said. ‘1£ interest rates are cut to a record low of 2.5 per cent this week, it more than likely will result in an additional flurry of activity as buyers try to jump on the property ladder before it further strengthens and stock levels become even tighter,” The last time rates were changed during an election campaign was in

2007, when the REA raised rates to 6.75 per cent under former prime minister John Howard who then lost to Kevin Rudd. Australian and New Zealand Banking Group chief economist Warren Hogan, who recently changed his forecast in favor of an August 6 rate cut, said while it is best to steer clear of an election campaign when it comes to moving rates, the RBA has little choice given the economy’s weakness and pressure on the non-mining industries from the Australian dollar.