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Continuous lockdowns recently in Melbourne have hit property auctions in our city, but most experts do not expect to see an end to the boom any time soon, though price rises are likely to slow down.
Preliminary figures from researcher CoreLogic show that almost two-thirds of auctions scheduled in Melbourne during the week ending last Sunday were withdrawn, contributing to a clearance rate of a paltry 35 percent.
Even with a lot of auctions being cancelled, there still appears to be plenty of demand from buyers. That is being driven by record-low variable mortgage interest rates and fear of missing out by wannabe property owners.
However, property prices in Melbourne could soon be hit by affordability constraints.
Currently, ANZ economists are forecasting national property prices to rise by more than 20 percent in 2021, unaffected by the latest round of lockdowns.
Even in Melbourne, where the clearance rate had been hit the hardest, prices are still holding up well considering the lockdowns.
Some analysts expect house prices across the capital cities to rise by 7 percent next year and a further 3 percent in 2023.
Other analysts are forecasting dwelling values to rise by 5 percent next year, followed by a drop of 5 percent in 2023.