Rising interest rates are finally starting to bite into buyer demand, with auction clearance rates dropping in Sydney and Melbourne last week.
Sydney’s clearance rate dropped from 69.4 per cent last weekend to 66.3 per cent this weekend as home buyers took into account the RBA’s latest rate hike.
A four bedroom unit in Abbotsford was the most expensive property sold in the capital city, selling under the hammer for $3.1 million; while a 2 bedroom unit in Cabramatta was the cheapest at $170,000.
In Melbourne, a four bedroom house in Kew was the most expensive property sold at $3.6 million; while a three bedroom house in Cranbourne was the cheapest at $240,000.
After enjoying a stellar couple of months, Melbourne was also bitten hard by a lack of demand, with auction clearance rates hitting 67.2 per cent this weekend – down from the 74.9 per cent recorded last weekend.
SQM Research head of property Louis Christopher said the RBA’s decision to move rates higher for the third consecutive time this year would have a significant impact on first homebuyers.
“We are seeing a situation where listings are increasing and more vendors are placing properties on the market, but housing financing approval data is showing demand is weakening,” he said.
“The outlook is that the rate of house price growth is definitely going to slow in the second half of this year.”