Sydney’s housing auction market has recorded its lowest clearance rate in more than six years, while Melbourne has posted its weakest result in almost five years.
New figures from property research firm Cotality show fewer than half of the 1,771 homes taken to auction around Australia sold last week.
The firm expects the national clearance rate to fall further, closer to 40%, once all results are collected.
Here’s what you need to know.
Clearance rate
Auction clearance rates measure the percentage of properties that sell at auction.
Not every property listed for auction is sold. Some are withdrawn before auction day, while others fail to attract a winning bid.
Clearance rates provide a snapshot of buyer demand, so they are closely watched as a measure of housing market strength.
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Cotality’s latest report showed a preliminary national clearance rate of 49.2%, with less than half of the 1,771 homes taken to auction last week selling.
Sydney recorded a preliminary clearance rate of 47.3% – its weakest result since April 2020, during the early months of the pandemic.
Melbourne also posted its lowest clearance rate since September 2021, when the city was in lockdown, with just 50.2% of homes selling at auction.
Why so low?
Higher interest rates and cost-of-living pressures have continued to weigh on buyer confidence.
The Reserve Bank held the cash rate at 4.35% earlier this month after three rate hikes this year, but many economists still expect further increases before the end of 2026.
Meanwhile, inflation and higher fuel prices linked to the closure of the Strait of Hormuz have added to pressure on household budgets.
