February's rate cut appears to be fanning flames in the already overheated property markets of Sydney and Melbourne.
Figures from CoreLogic RP Data on Thursday show Sydney's auction clearance rate spiked to its highest level in a year last week, at 83.3 per cent.
And Melbourne's auction clearance rate skyrocketed, lifting 10 per cent from the previous week to 70.9 per cent.
Meanwhile, the number of auctions scheduled in Melbourne for this week jumped to 936, from 584 in the previous week.
CoreLogic RP Data's auction specialist Robert Larocca said the figures suggested the Reserve Bank's February interest rate cut had been welcomed by buyers.
Last week's strong clearance rates would encourage more vendors to put their properties on the market, he said, in response to the clearly strong demand from buyers.
The RBA's February rate cut came as a surprise to most economists, some of which raised concerns about its potential to spark a housing bubble in the already overheated Sydney and Melbourne markets.
And the minutes of the RBA's February meeting, released on Tuesday, reveal the RBA itself is concerned about house price growth and investor activity in those markets.
House price inflation in those cities remained well above the growth rate of household incomes, the RBA said, while investor credit growth was continuing to increase "at a noticeably faster rate" than owner-occupier housing credit.
The bank said it would carefully monitor the housing market, as well as measures by the Australian Prudential Regulation Authority to temper investor activity.
The latest official housing finance figures suggest investors rushed to get their loans approved before those measures were introduced in December, with investor loans jumping six per cent that month to a record high $12.6 billion.
The figures confirmed that the investor "frenzy" gathered even more pace in December, with the value of investor loans almost 20 per cent higher than a year earlier, CoreLogic RP Data research analyst Cameron Kusher said.
That investment was largely focused within Sydney and Melbourne, which recorded the greatest home price growth but the lowest rental yields.
"The falling rental yields and rising home values suggests most investors are firmly focused on capital growth rather than rental returns at a time when interest rates are at record lows and may move even lower," Mr Kusher said.
"While it has been a successful strategy over the past couple of years, investors should be cautious because the capital growth won't continue forever and they should give some consideration to the rental income from the property."
Meanwhile, new figures on Thursday showed that residential land prices hit an all-time high in 2014 due to an undersupply of vacant land - an issue RBA governor Glenn Stevens has recently flagged as the main barrier to housing affordability in Australia.