Auction market cools as preliminary clearance rate hits six-year low

The combined capitals preliminary clearance rate reached a new cyclical low last week, easing to 54.5%, the lowest reading recorded since April 2020. The subdued result coincided with a notable increase in activity, with 2,681 homes taken to auction. Volumes were 15.2% higher than the previous week, with the upcoming King’s Birthday public holiday potentially bringing some auctions forward, although they remained 8.1% below the equivalent week last year.

Melbourne accounted for the largest share of activity, with 1,264 homes going under the hammer, representing a 20.3% increase on the previous week. Of the results collected to date, 58.1% returned a positive outcome, compared with a preliminary reading of 60.2% the week prior.

Sydney recorded 997 auctions, a 23.9% rise on the volume held the week before. The preliminary clearance rate decreased to 51.8%, from 56.9% in the previous week. This represented Sydney's second weakest preliminary result so far this year, behind the 49.2% recorded during the week of the Federal Budget announcement. Outside of that result, Sydney's clearance rate has not been below this rate since the early months of the pandemic in April 2020.

Across the smaller capital cities, Brisbane saw the most activity, with 201 homes taken to auction and an early clearance rate of 43.3%, marking the lowest preliminary result since April 2023. Adelaide held 132 auctions, of which 65.3% reported a positive outcome to date. While this was the strongest result across the capital cities, it was well below the preliminary readings of 72.0% and 75.7% recorded over the prior two weeks. Canberra hosted 75 auctions and returned an early clearance rate of just 39.1%, the lowest reading since June 2019. Perth recorded eleven auctions, while Tasmania held a single auction.

Overall, the combined capitals preliminary clearance rate fell (54.5%) to the lowest since April 2020, with weakness most pronounced in Sydney (51.8%) and Brisbane (43.3%). The combination of rising volumes and falling preliminary clearance rates points to a sizeable shift in the demand-supply balance across the country since last Spring, with demand facing the headwinds of affordability constraints, three interest rate rises and the deterioration in consumer sentiment, not to mention the policy changes in the Federal Budget that will discourage investor purchases of existing properties. Cotality’s listing data points to a gradual increase in the total stock of properties available for sale, easing from very tight conditions in late 2025.

Looking to the week ahead, approximately 1,250 homes are scheduled to go to auction, with the King’s Birthday Public Holiday impacting activity in both Sydney and Melbourne, rising to around 2,190 the following week.