Australia's auction market remains subdued, with the combined capital cities' preliminary clearance rate holding below 50% for a third consecutive week, even as individual cities show diverging fortunes.
According to Cotality head of research (Asia Pacific) Tim Lawless (pictured), "the combined capitals preliminary clearance rate has found a floor over the past three weeks, holding in the high 40% range."
This week's early reading came in at 49.8% — though for context, last week's initial figure was later revised down to just 45.0% once final results were counted.
Auction volumes fell sharply, with 1,447 homes taken to market nationally, down 17.2% on the previous week and 19% lower than the same week last year.
Sydney and Melbourne posted modest rebounds: Sydney's 562 auctions produced a clearance rate of 51.6%, up from last week's preliminary 47.3% — itself the city's lowest since April 2020 — which was later revised down to 43.1% on final numbers. Melbourne led volumes with 582 auctions, and its clearance rate climbed 4.3 percentage points to 54.5%, still its sixth straight week below 60%.
But not every city followed the same path. Brisbane fared worst, with its rate falling to 23.8%, the weakest result since May 2020, while Adelaide dropped 23 percentage points to 45.7% after a standout 68.7% result the week before, ABC News reported.
The slowdown isn't confined to auction rooms: ABS lending data show new dwelling loan commitments fell 6.2% by number in the March quarter, with owner-occupier, investor, and first-home buyer commitments all down — evidence the pullback extends to financing activity too.
Behind these diverging results, AMP deputy chief economist Diana Mousina points to a common thread: policy uncertainty.
"The main reason is multi-fold, but most recently it's been due to concern about lower investor demand in the housing market as a result of the budget changes," Mousina said, adding: "The changes in the budget are another hit to the property market."
The rate environment is compounding that pressure: the Reserve Bank has held the cash rate at 4.35% following three hikes earlier this year, with the board noting that "financial conditions are now tighter than they were, and there are signs that the economy is slowing as expected." The next decision is due on 11 August.
From July 2027, negative gearing on established properties will apply only to new builds, alongside an overhaul of the capital gains tax discount, changes likely to affect property investors' borrowing capacity and appetite alike.
Treasurer Jim Chalmers downplayed the weak run, telling ABC's Insiders: "It's best not to overreact to data from a week or two, or even a month or two."
For brokers, the divergence between cities means client conversations need to be market-specific: what applies in Melbourne's rebound won't hold in Brisbane's continued slide.
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