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Sales soft as little guys wage war on big four Jonathan Chancellor PROPERTY EDITOR
November 7, 2010


INTEREST rate rises sent a tremor through the property market yesterday, with softer auction clearance results reported.

As the housing market faced its first test since last week's Melbourne Cup rate rise, Treasurer Wayne Swan urged people to once again ''have a good look'' at the smaller lenders that suffered a huge collapse in market share in the global financial crisis.

Credit unions and building societies have declared war on the big banks, attacking their growing dominance while vowing to keep interest rate rises to a minimum.

Advertisement: Story continues below At auctions yesterday there were plenty of cool heads and carefully calculated bids - a far cry from the heated market of 12 months ago. Yesterday's 54.6 per cent success rate was down on last weekend's 57.5 per cent.

Analysts noted it was not the weakest result this year, but it ranks below the year's 67 per cent average and the clearance rate for the same time last year, which was 66.6 per cent.

Anthony Ishac, from the Fairfax-owned Australian Property Monitors, said last week's rate rise had dampened buyer demand.

''There's no doubt the rate rise and additional [Commonwealth Bank] top-up will send out warning signs to buyers. Some of that may have played into this week's figures,'' he said.

Last week Abacus, which represents the mutual sector, began an $8 million print, television and online advertising campaign in an attempt to lure customers who were ''fed up with the banks who had taken it one step too far''.

Abacus chief executive Louise Petschler said virtually all credit unions and building societies had vowed to stay within the limits set by the Reserve Bank, with some funds refusing to raise rates at all.

Mr Swan said: ''I strongly encourage Australians to have a good look at the competitive mortgage deals offered by many credit unions and building societies, which are often much cheaper and better value than the big banks.''

A secret briefing note obtained by The Sun-Herald confirms Treasury is working on a plan to allow customers to carry account numbers from one financial institution to another.

There were 592 properties listed for auction yesterday, 45 per cent more than the same period last year, as home owners rushed to take advantage of recent capital gains and sell before further interest rate rises dampen demand.

Prices started yesterday at $261,000 in Cabramatta. The dearest sale was $3.6 million in Northbridge.

Chris Scargall, general manager of Elders in Lidcombe, said the ''double whammy'' from the Commonwealth Bank had affected his sales yesterday, all of which were below agent and owner expectations. ''It really has done damage.''

Grant McEnally, of Gilmour Property Agents in Castle Hill, said buyers had been driving harder bargains.

''Buyers are doing their homework more, not jumping in like the madness we had previously. Vendors need to price more realistically - if they are too ambitious, the property will just sit there.''

with Jessica Wright, Josh Gordon, Danielle Teutsch and Elise Dalley