Australian home buyers are deserting the property market as auction clearance rates plunge to 44 per cent, marking the lowest market performance since the early weeks of the Covid-19 pandemic in April 2020, Nine reported.
The stark drop reflects a broader market contraction driven by high interest rates and diminished buyer confidence. Experts warn that house prices will continue to fall as fewer than half of all homes listed for auction successfully sell.
- Market Liquidity Drop: Auction clearance rates have contracted sharply to 44 per cent, indicating a severe freeze in transactional activity comparable to early pandemic conditions.
- Monetary Policy Pressures: The Reserve Bank cash rate sits at 4.85 per cent, creating the highest borrowing friction in 18 years and directly dampening buyer demand.
- Vendor Adjustment: Sellers are increasingly withdrawing properties or being forced to price lower to meet the constrained market reality.
Research group Cotality data shows that preliminary auction clearance drops affected all five capital cities, with Sydney and Melbourne experiencing the most severe contractions. Sydney recorded a clearance rate of 48 per cent over the weekend, the first time the figure fell below 50 per cent for the spring season.
Melbourne crashed to 47.8 per cent, representing the Victorian capital’s lowest performance level since September 2021. Amid these falling metrics, many prospective vendors are actively pulling their properties from the market to wait out the current downturn.
“There was about 1800 auctions over the weekend. You know, 12 months ago it was well over 3000 auctions. So there’s a lot less properties actually going to auction at the moment,” Tom Hawley, director at Azura Financial, told Today.
High interest rates continue to stifle active buyer demand across the national property footprint, with the official cash rate maintained at 4.85 per cent. Hawley said that persistent inflation running outside the Reserve Bank’s target band has effectively eliminated hopes of an imminent rate cut.
“It’s more about certainty for people. If the market’s going to continue falling, it’s hard to have that confidence and certainty to be able to make a major financial decision and buy a property,” Hawley told Today, adding that the past six months have registered the steepest property decline on record.
| Capital City Market | Recent Clearance Rate | Historical Context |
|---|---|---|
| National Average | 44 per cent | Lowest since early Covid-19 pandemic weeks of April 2020 |
| Sydney | 48 per cent | First time dipping below 50 per cent this spring |
| Melbourne | 47.8 per cent | Lowest level since September 2021 |
Vendors determined to proceed with a sale in a declining market must adjust pricing strategies to align with current liquidity constraints. “If you do want to sell, you need to guide low, you know, you need to show buyers that you understand where the market is so that they see value,” Hawley told Today.
- Nine: Property news: Auction clearance rates lowest since Covid as buyers walk away
- Cotality Market Research Data
- Reserve Bank of Australia Monetary Policy Statistics
