Conventional wisdom said a rise in official interest rates would be the trigger for housing prices to fall, because it would reduce the amount of money that buyers can borrow to spend at auction. So what changed? | TawarRazaghi property realsestate
Property values in Sydney and Melbourne have fallen even before the RBA lifts interest rates.A recent change to lending rules means buyers cannot borrow as much.Conventional wisdom said a rise in official interest rates would be the trigger for housing prices to fall, because it would reduce the amount of money that buyers can borrow to spend at auction. So what changed?
On the supply side, the total volume of listings in the two cities is higher than a year ago, offering buyers more choice and reducing the frenzied bidding at auctions of last autumn that pushed prices up. He said lending had come off from an elevated level and values have fallen from “extraordinary” gains, both pointing to a cooling market regardless of what the Reserve Bank does.Credit:The picture is different in other capital cities. While listings were higher in Sydney and Melbourne, there was less to choose from in Brisbane, Adelaide and regional Australia, which have all escaped price falls to see selling conditions remain strong, according to CoreLogic.
“That’s filtering through lower prices. It’s going to impact Sydney and Melbourne first because they are the most expensive markets,” Dr Oliver said. “The reasons prices have come down before the RBA has done anything is that fixed rates have started to rise, and poor affordability.”
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