The number of homes selling at auction in Sydney and Melbourne has fallen to levels not seen since the Covid pandemic, as sellers across Australia’s two biggest property markets rethink their plans amid persistently weak clearance rates and growing frustration over the Albanese government’s tax reforms.
New data from property research firm Cotality shows Sydney recorded its weakest week of auction sales in more than six years last week, while Melbourne’s clearance rate dropped to its lowest point in almost five years. The capital city average clearance rate — the proportion of homes sold at auction compared to those listed — fell to 42.3 per cent, with Cotality research director Tim Lawless warning the figure was likely to settle in the low 40s again.
“Since mid-May, the volume of auctions has held consistently lower year-on-year, indicating cyclical factors are at play as vendors rethink their selling plans amid persistently weak clearance rates,” Lawless told the Australian Financial Review.
Sydney’s clearance rate dropped 0.1 per cent to 47.3 per cent, its lowest since April 2020, with 642 properties listed — almost 17 per cent fewer than the same period last year. Melbourne’s rate slipped from 50.6 per cent to 50.2 per cent, the weakest since September 2021. Brisbane recorded the lowest clearance rate of any capital city at 39.3 per cent, though that represented a six-point improvement on the previous week. The ACT fell to 39.5 per cent from 47.1 per cent, while Adelaide bucked the national trend, jumping from 40 per cent to 68.7 per cent with more properties going to auction than the week before. Total auctions across the country fell to 1,771 from 1,880.
The mood on the ground reflected the figures. Buyers’ agent Matt Cleverdon watched the sale of a four-bedroom home in Toorak, inner-Melbourne, which eventually went for $3,658,000 after the final 11 minutes of bidding saw three buyers raise each other by just $1,000 at a time. “It was a sign of the times. Everyone has a hard limit. Getting $1,000 was like taking blood from people. It was just amazing,” Cleverdon said.
Sydney-based selling agent Andy Lin of Uniland Real Estate saw a property in Epping sell for $4.8 million at the weekend but was clear that the result was an outlier. “We used to have a 93 per cent clearance rate in this area. Agents, landlords — everyone’s under stress due to the tax reform. We’re lucky the good homes still stand out,” Lin told The Australian. Melbourne-based agent Justin Long said more sellers were choosing to hold back rather than test a weak market, a sentiment echoed by Sydney agent Hanna Kim, who noted that buyers were taking a more conservative approach to spending.
Despite the gloom, high-value sales did still take place. A four-bedroom home in Sydney’s Glebe sold for $3.23 million after six potential buyers registered interest.
Treasurer Jim Chalmers sought to calm nerves on Sunday, urging sellers not to read too much into short-term data. “It’s best not to overreact to data from a week or two or even a month or two,” he told ABC TV’s Insiders. “We saw in 2022 for example, a softening in house prices because interest rates started to go up. It’s not especially unusual to see that sort of volatility in different markets.”
