Senior economist at Westpac Matthew Hassan thought February’s clearance rate could have been higher without the rate rise.

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“I think the biggest warning here is that February is usually a seasonally strong period,” he said. “Perhaps, in the absence of the RBA move, we would have had a 70 per cent clearance rate [in both cities].”

Hassan said that Sydney and Melbourne markets had already been slowing, whereas Adelaide, Brisbane and Perth had all seen more robust growth in the past year. Separate data from Cotality showed Sydney and Melbourne home values were flat in February.

The clearance rate is closely watched as a leading indicator of price growth. It is calculated by taking the number of successful sales and dividing by the total number of auction results reported to researchers by deadline. Domain uses a weekly figure to catch auctions not held on Saturdays.

“We expect that interest rate increases will significantly dampen markets this year,” Hassan said, “taking the heat out of those stronger markets, and weighing on Sydney and Melbourne.”

But as both Powell and Hassan caution, this doesn’t mean prices are likely to go down.

“But we know that price momentum is likely to start slowing,” Powell said.

The market has been shifting to more affordable options for some time. For example, Powell noted unit prices rising faster than house prices in Sydney.

Suburban family homes have been less affected by the rate worries.

At a regional level, Powell noted that the Melbourne areas with the strongest clearance rates in February were in the middle-ring, where owner-occupier families tended to be more motivated by a need to buy.

“I think there’s an element of affordability there,” she said. “The premium markets, which are in the inner east, are seeing a lower clearance rate, as are lifestyle markets like the Mornington Peninsula.”

For Sydney, the picture was obscured by the “auction-heartlands” of the city and inner south and eastern suburbs regions, she said.

But while clearance in these areas is generally higher – with fewer homes, and a larger percentage going to auction – owner-occupier family regions like Parramatta, and Baulkham Hills and Hawkesbury, grew strongly in February despite an overall weaker market.

“I do think that this is that kind of owner-occupier, family demand. It’s not necessarily as investor driven [as other areas],” she said.

While rate hikes might have a more immediate impact on buyer expectations, global factors like the Iran war could also play into buyers’ caution in the coming months.

“Ultimately, if it means that it impacts supply chains for oil, which it’s going to do, it is going to impact everything,” Powell said.

“The RBA and the government are going to be very much focused on the war in the Middle East.”

Hassan said it was too early to tell whether the conflict would factor into buyers’ decision-making.

If it does, it might result in more cancelled auctions and a cautious shift to private sales, rather than a significant change in the clearance rate, he said.

“I think that can tell you when uncertainties really come in,” he said. “That comes back to fewer buyers, rather than concerns about clearance rates.”