Melbourne and Sydney continue to perform strongly, with last weekend’s auction clearance results tipping 70 per cent in both cities.
Melbourne continues to position itself as a force to be reckoned with, recording a clearance rate of 80.9 per cent and a median house sale value of $415,000.
Similarly, Sydney also performed well last weekend with a clearance rate of 73.1 per cent.
Statistics from RP Data show the median house price in NSW is now $555,000 and is widely expected to climb higher while ever demand is increasing.
Earlier today the Reserve Bank warned that house prices would keep rising until housing construction accelerated to meet the swelling population.
Delays on planning approvals and a shortage of skilled tradesmen - a problem likely to worsen as the mining boom looks set to return - are contributing to rising costs in the sector.
''While consumers are shrugging off interest rate hikes, rising borrowing costs are clearly hurting the housing market," said Moody's Analytics economist Matthew Circosta.
Data from the Australian Bureau of Statistics showed the number of home loans plummeted by 7.9 per cent in January, the biggest fall since June 2000.
''This marks the fourth consecutive decline in housing finance since the Reserve Bank of Australia commenced tightening monetary policy, suggesting momentum in the property market is fading,'' Mr Circosta said.
RP Data’s senior research analyst Cameron Kusher agreed that while the market is currently being fuelled by strong migration and insufficient housing supply, higher interest rates are likely to dampen property value growth.
“Over the next year we anticipate a lower level of growth nationally (anticipated to be single figure) which will be bought on by tighter lending requirements and higher interest rates,” Mr Kusher told Real Estate Business.