The clearance rate of Sydney's home auction has taken another plunge over the weekend. This only shows that the recent increase in home mortgage rates has already taken a toll over buyer confidence.
According to the Daily Mail, the 60 percent mark that the clearance rate of Sydney's home auction has plunge to is the lowest over the last three years. It was also noted that even if the national average auction clearance rate for November this year is similar to the same period of last year, there is a large deviation on rates on a per city level.
More specifically, according to Domain, 59.2 per cent sold on Saturday and that is down by 4.1 percent compared to last week's 63.3 percent. With only six weeks left and 6000 auctions needing to be conducted in Sydney it is considered an uneasy time for sellers. Buyer activity and clearance rates have been falling since early 2012 in the Sydney market.
Currently wary buyers waver in home purchase for fear that the rates will rise further. To make things worse for the buyer, the Reserve Bank has decided to keep the official interest rates on hold in November, at two per cent for the sixth consecutive month, instead of cutting them.
The rising interest rates are speculated to crash the housing market in the days or months ahead. It has been reported though that it is not yet a time to be alarmed because there are still some areas that are booming despite the current economic condition. For example, according to Daily Mail , the Northern Beaches still have a clearance rate above 80 per cent. Two of the top sales according Core Logic RP Data was reportedly in the Northern Beaches. In the meantime, Canberra's auction clearance rate got a bump from the same period of last year. It is at 78.3 per cent from 50 per cent.
