Australia's residential property auction market has recorded its weakest result since the peak of the COVID-19 lockdowns, with the national clearance rate falling to 47.4 per cent, according to Cotality property research data. Of approximately 1,900 homes that went to auction last week, fewer than half sold.
Sydney recorded a clearance rate of around 47 per cent and Melbourne around 51 per cent. A broader comparison tells the story plainly: the same weekend last year, the national weighted average clearance rate was 65.3 per cent.
Two pressures have converged on the market. Three consecutive RBA rate rises in the first half of 2026 have added to mortgage stress for existing borrowers and reduced borrowing capacity for new buyers. The federal government's proposed changes to negative gearing and the capital gains tax discount, announced in the May budget, have additionally softened investor demand.
Jacob Caine, president of the Real Estate Institute of Australia, said agents in some markets were reassessing their auction strategies. 'Some areas will continue to push through with auctions,' he said. 'Some areas will reconsider.'
Data from early June showed 'sold prior' activity, where vendors accept pre-auction offers rather than risk a publicly failed auction, peaked at around 33 per cent, as sellers became more willing to take the best offer available before auction day.
Nicola Powell, Domain's chief residential economist, said the shift reflected sellers reading buyer depth. 'If they don't feel they have the buyer depth needed to create competition under an auction setting, sellers become much more open to early offers,' she said.
Vendor advocacy director Kathryn Fantov put it plainly. 'If we say no and think we can get more at auction, there's a very big chance they'll potentially just walk away,' she said. 'The best price they're probably going to achieve in the next six months may be today.'
