Auction results strong, but will rate rises stop the property boom?
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Auction results remained higher over the weekend, but property experts warn high sales cannot be sustained for long if interest rates continue to rise.
Housing Industry Association chief economist Harley Dale says the Reserve Bank has a buffer zone of about 100 points before a substantial impact would be observed in the market.
"To an extent the question is a little like asking how long is a piece of string. It's our thinking that the first 100 points, 25 of which we have already received, is probably manageable. Once we get into a cash rate above that, then you'd see a little bit of a crimping in both housing activity and the rate of growth and house prices."
Ken Morrison, executive director of the NSW Property Council, says the Reserve Bank of Australia must be cautious in raising interest rates as the economy recovers.
"I think most people are expecting rising interest rates to some extent, but the question is the timing and the magnitude of those rises. Our concern is that if they rise too far too fast, it will start turning people away from the housing sector."
