Sydney and Melbourne recorded a successful weekend with clearance rates above 75%, suggesting Australia’s main two property markets continue to be resilient.

Fears of property prices plunging now appear to have been overdone, with combined capital city clearance rates steady at above 70% for the second week in a row.

Sydney and Melbourne recorded clearance rates of $76% and 77% respectively over the weekend, according to CoreLogic RP data. It’s the third week in a row for Sydney above 75%.

Auction clearance rates 18 Jul 2016

Source: CoreLogic RP Data

But if there’s one thing to take away from the data is that auction markets are slowing down on the number of auctions held. Over the weekend a combined 1378 auctions were held in capital cities – well down on the 1,827 auctions held on the same weekend last year.

Sydney held 512 auctions on the weekend compared to 794 last year, while Melbourne had 669 auctions compared to 759 last year.

One factor that may have influenced the strong auction clearance rates over the past few weekends is the result of the Federal election. The Labor Party had planned to make substantial changes to negative gearing – only allowing it on brand new properties from Jul 1, 2017 and also cut the capital gains tax discount from the current 50% to 25%.

That may have spooked may property investors who are likely to be relieved now and may be re-entering the property market. That’s despite the big four banks Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) clamping down on lending to investors.

Despite the moves by the banks, interest rates on mortgages still remain relatively low and other conditions aren’t excessively restrictive.

Foolish takeaway

Property values appear to be heading for another year of increases – particularly in Sydney and Melbourne, although other capital cities like Perth and Darwin look set to continue struggling.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.