Australian property prices tumble at rates not seen since GFC

Commercial lending rates have been increasing for almost a year as the economy began to emerge from its Covid-induced funk. The Reserve Bank, which began lifting its cash rate in May from a record low 0.1%, is widely expected to hike again on Tuesday to mark its fastest pace of increases since 1994.

One additional drag on the market could come when many of those who took out fixed-rate loans when rates were low have to refinance. These peaked at almost half of new mortgages in July and August 2001, with borrowers facing much higher repayment rates when they refinance after two years or so.

Renters, though, are unlikely to see much benefit from the sagging property prices.

The return of overseas students and migrants should add to rental demand in the short term, particularly in Melbourne and Sydney, he said.

During the past week, auction activity rose for the third week in a row, with 1,909 homes taken to auction across the combined capitals. That tally was up 5.4% on the previous week and 8.4% on a year earlier, CoreLogic said.