Signs of slowing in the Sydney and Melbourne housing markets, says RBA
While Australian housing prices have skyrocketed over 2015, according to the Reserve Bank of Australia there are signs the Sydney and Melbourne property markets could be beginning to slow with auction clearance rates falling and price growth easing in Sydney.
The RBA explained in a statement that loan approvals data suggested that the overall level of investor demand has remained strong, especially in New South Wales and Victoria and the main risk from a high level of investor activity is the potential impact on housing prices.
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“Specifically, this activity can amplify the run-up in housing prices and hence increase the risk of prices falling significantly later on.”
The RBA’s comments come as Sydney saw a weekend of plummeting auction clearance rates. Domain Group explained that sellers are 3 months too late, with clearance rates on the slide. In fact its data showed Saturday’s 65.1% clearance rate, was down from almost 90% in May and 70% just a week ago, which indicated the market is leaning in the direction of buyers.
Domain Group senior economist Dr Andrew Wilson said it’s definitely a buyer’s market in Sydney’s north-west and west. “There are just fewer buyers in the market, especially now with the prospect of higher interest rates,” he said.
Wilson is referring to Westpac’s decision to lift rates by 0.2%, with more lenders expected to follow its rate hike move.
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