Home clearance rates fall amid mortgage concerns

Monday 25 October 2010

Article by Mozo

Clearance rates at Australian property auctions are falling amid rising concerns about impending interest rate hikes, it has been suggested.

Melbourne-based housing analyst Sam Parsons noted that the city's dwindling clearance figures are a reflection of the absence of overseas buyers from the established homes market, as well as concerns about the likelihood of higher interest rates.

Speaking to the Australian, he said: "Clearances started to fall immediately as rates started to go up.

"Another interest rate rise on Melbourne Cup day will see them stay down for the remainder of the year."

Rate fears could also prompt more consumers to compare home loans in search of better deals. Mr Parsons' comments came as the Real Estate Institute of Victoria reported a property clearance rate of only 66 per cent at a weekend auction in Melbourne earlier this month.

This contrasts with the 82 per cent clearance rate recorded around the same sort of time last year.

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