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XmasIT’S not just the Christmas spirit that greedy bank bosses have ruined – Melbourne’s property market is also suffering from super-sized interest rate rises.

The weekend auction clearance rate limped to 61 per cent as rain and more home loan pain thinned crowds and cautious buyers refused to pay inflated prices.

The sluggish results followed NAB and Westpac joining the Commonwealth and ANZ’s giant rate hikes above the Reserve Bank’s Melbourne Cup move.

Real Estate Institute of Victoria spokesman Robert Larocca said the banks had gatecrashed the normally buoyant spring season.

“Their action has reduced confidence with home buyers and created uncertainty at the busiest time of year,” Mr Larocca said.

The Commonwealth lifted standard variable rates by 0.45 percentage points, the NAB (0.43), ANZ (0.39), and Westpac (0.35) compared with the RBA’s 0.25 per cent rise, adding $70-$90 a month to a typical $300,000 loan.

Mr Larocca said confused buyers and vendors no longer knew when rates would rise and by how much, as banks increasingly moved out of step with Reserve Bank changes.

The Greens will try to force the banks to limit rate hikes to official adjustments for two years under proposed legislation to be introduced into Parliament this week.

Greens Leader Bob Brown said he hoped to get Opposition support from Joe Hockey.

Mr Hockey said he was “not about any controls” on the banks themselves and would instead introduce legislation this week to stop banks telegraphing rate shifts to rivals through the media.

Auction clearances were marginally up compared with 59 per cent the weekend earlier. Most of the 328 properties that passed in did so on vendor bids.

The results follow four months of clearances around 68 per cent.

Story by Karen Collier, Ben Packham – www.heraldsun.com.au

Tags: auction, banks, economy, interest rates, marketing, news, property, real estate

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