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Date Published : Wednesday, April 02, 2008
The recent interest rate hikes have forced many people looking to buy property at auction to keep their money in their pockets, new research has revealed.
According to a study by BIS Shrapnel, clearance rates at property auctions last weekend (March 29th and 30th) were at their lowest for a number of months.
In Adelaide, the clearance rate was down nearly 30 per cent from this time last year, with only 44.4 per cent of properties selling at auction.
Meanwhile, the Australian reports that in Brisbane, the clearance rate over the weekend of 30.8 per cent was more than 15 per cent lower than the same time last year.
Two successive interest rate rises by the Reserve Bank of Australia took rates to 7.25 per cent - their highest level in 12 years. However, earlier this week, the Reserve Bank decided to hold rates at that level for April.
As a result of the high interest rates, many buyers have been put off taking out mortgages and other home loan products in order to fund properties, causing a slowdown in the property auction market.
Managing director of BIS Shrapnel Robert Mellor told the publication: "The latest interest rates rise has had an effect on the economy all round. People are a little bit spooked.
"I think, if there are no more interest rate rises for a while, then there will be a bit more confidence amongst investors."
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