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Here's the Australian housing market's next challenge

Photo: Ian Waldie/ Getty Images.

Australia’s love affair with residential property appears hard to shake. For the third weekend in succession, auction clearance rates across the nation’s capital cities have topped 70%.

According to the latest market update from Corelogic RP Data, the preliminary national auction clearance rate rose to 72.3% last weekend, up from 71.8% seen previously.

Adding to the strength of the data, something that has occurred despite an increasingly negative outlook offered by some market commentators, the increase came despite a sharp uplift in the number of auctions held.

CoreLogic RP Data note that 2,215 capital city auctions took place, far higher than the 1,400 held in the prior corresponding week.

“Over the next few weeks it is expected that auction activity will continue to ramp up which will further test the resilience of auction markets on higher volumes,” says the group.

Here’s the preliminary auction results by city for last weekend.

And here’s a chart that reveals the sharp spike in clearance rates registered in recent weeks.

Despite lower expectations for house price growth, along with the prospect for changes to the tax treatment for housing, on recent evidence it’s done little to dissuade buyers for the moment.

Indeed, house prices in Australia’s largest and most expensive housing markets – Sydney and Melbourne – have already increased by 1.0% and 2.3% respectively since the beginning of the year.

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