» Interest rates bite buyer demand

Auction clearance rates in Melbourne in Sydney are taking a dip due to the of the last interest rate hike.  Since the Reserve Bank of Australia announced that the latest interest rate increase, the clearance rate in Sydney went down to 66.3 percent from 69.4 percent.

In Melbourne, the lack of demand for properties saw the auction clearance rate take a nosedive from 74.9 percent last week to 67.2 percent this week. The most expensive property that was sold in Melbourne was a four-bedroom property in Kew that went under the hammer for $3.6 million. The cheapest property that was sold is a three-bedroom house in Cranbourne which was sold for $240,000.

Meanwhile, the most expensive property that was sold in Sydney was a four-bedroom Abbotsford property which was sold for $3.1 million. On the other hand, a two-bedroom unit in Cabramatta was the cheapest property sold at with a rate of $170,000.

Due to these developments, SQM Research Head for Property Louis Christopher said that the latest Reserve Bank of Australia interest rate hikes would bring a drastic impact to first time home buyers. He added that though auction listings are increasing, the demand for these properties is dwindling. He also predicted that property price increase will slow down during the second half of the year.