Record Sydney home sales fuel bubble fears

Sydney

SYDNEYSIDERS wanting to sell their homes have never had it easier. The proportion of successful house auctions in Australia's largest city was above 80 per cent at the weekend for the fourth week in a row. That is the longest stretch on record and highlights the potential consequences of a projected interest-rate cut.

Reserve Bank of Australia governor Glenn Stevens's effort to revive business investment with cheap finance is adding fuel to the country's biggest property market. Home sellers may get a further boost, with 18 of 29 economists forecasting a 25 basis-point cash rate reduction on Tuesday. Unlike in the United States, where auctions are frequently used to dispose of distressed properties, sellers in Australia try them when the market is strengthening. In Sydney, 82.8 per cent of homes put up for auction on Feb 28 were sold, according to CoreLogic RP Data.