Auction sales in Australia's largest property markets, Sydney and Melbourne, have reached their lowest levels in five and six years respectively, according to recent data. The downturn, described as similar to conditions seen during the COVID-19 pandemic, has prompted sellers to reconsider their plans.
Cotality research director Tim Lawless indicated that the national average auction clearance rate is likely to fall into the low 40 percent range. Last week's capital city clearance rate stood at 42.3 percent. Sydney recorded a clearance rate of 47.3 percent, the lowest since April 2020, while Melbourne's rate dropped to 50.2 percent, its lowest point since September 2021.
Overall, 1,771 auctions were scheduled nationwide, a decrease from the previous week's 1,880 and nearly 17 percent lower than the same period last year. Despite the broader market weakness, some properties continue to sell for significant sums. A four-bedroom home in Glebe, Sydney, sold for $3.23 million, and another in Toorak, Melbourne, fetched $3.658 million.
Real estate agents have voiced concerns, with some linking the market's performance to tax reforms introduced by the Albanese government. "Agents, landlords – everyone's under stress due to the tax reform," stated Sydney-based agent Andy Lin. Other agents noted that buyers are exercising more caution, with bidding increments becoming smaller.
In contrast to the southern capitals, Adelaide saw a notable increase in its auction clearance rate, jumping from 40 percent to 68.7 percent, with more properties listed for auction. Brisbane's clearance rate also saw a six-point increase, reaching 39.3 percent.
Treasurer Jim Chalmers urged property owners not to overreact to short-term market data, citing the historical volatility of housing prices, particularly in response to interest rate changes. He advised against interpreting weekly or monthly figures as definitive market indicators.