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Housing market on ‘knife-edge’ despite rate pause

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The RBA’s decision to hold interest rate steady is unlikely to boost sentiment that was shaken by the bank’s move to increase rates twice after pausing in April.

is unlikely to bolster housing market sentiment, which has already been shaken by the central bank’s decision to increase rates twice since a pause in April, experts say.

AMP Capital chief economist Shane Oliver said any bump in housing market activity was likely to be short-lived.“The pause may set off the debate of whether interest rates have peaked, which might provide a degree of support and invigorate demand, but I think any lift will only be temporary,” Dr Oliver said.

Clearance rates also pulled back significantly across Sydney over the past weekend, dropping by 7.5 percentage points to 71.2 per cent. “I think if we see further rate rises in the coming months, then we could see sharper falls in clearance rates.”

 

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