Melbourne is set to surge ahead of Sydney and become Australia’s best performing housing market, with last week’s auction clearance rates in the NSW capital the lowest for the year, while action in the Victorian market held up. Only 66 per cent of Sydney homes put to auction last week attracted a buyer, according to Core Logic RP Data.
Melbourne performed better than at the same time last year and held steady with the week previous, with nearly 1400 homes going under the hammer at a clearance rate of 73.4 per cent. The drop in activity in Australia’s biggest property market comes as Westpac last week rose interest rates for owner occupiers in a move that many analysts expect will followed by the other majors.
Further debate on the future of the residential property market was sparked last week when Macquarie analysts claimed that house prices would drop by 7.5 per cent by mid-2017. Economist Saul Eslake said that buyer sentiment had changed due to uncertainty about interest rates and the reduction in lending to property investors.