Low auction clearance rates tipped to continue, according to Cotality

Property auction clearance rates pick up slightly as expert predicts slump to continue Sun 5 Jul 2026 at 6:22pm In short: Less than half of all properties that went to auction last week were actually sold. Brisbane's auction clearances crashed, as the rest of the national market slump continued. What's next? Experts say such rates are likely to persist, as multiple factors suppress the market. Less than half of all properties that went to auction in Australia were actually sold over the past week. According to the latest Cotality figures, the preliminary national auction clearance rate picked up from last week's 49.2 per cent to 49.8 per cent, which one expert says is an insignificant increase in the grand scheme of things. Last week's figures were already the lowest recorded since the COVID-19 market slowdown in 2020. Melbourne had the highest clearance rate with 54.5 per cent followed by Sydney at 51.6 per cent, Canberra at 50 per cent and Adelaide at 45.7 per cent. Brisbane lagged behind at 23.8 per cent, a rapid fall from last week's 39.3 per cent. The same time last year, Brisbane led the market with a 69.6 per cent clearance rate, while most Australian capital cities hovered between 63 per cent and 70 per cent, an indicator of a much stronger market. Cotality's Asia-Pacific executive research director Tim Lawless said while this week's numbers were not the lowest we have seen this year, the past three weeks have all been below 50 per cent. "It's pretty rare to see clearance rates this low,"he said. "Clearance rates persistently holding this low shows a mismatch between buyer and seller expectations. "It's probably another indicator of the market going through a phase of negative movements." According to Cotality figures, June saw the biggest monthly fall in national housing values since 2022, following the latest federal budget announcement limiting negative gearing to new builds. Mr Lawless said there were multiple factors at play suppressing the market. "Foundational challenges around affordability and serviceability, interest rate hikes, some pullback from investors post-budget, all those things combined are creating a softer housing market," he said. According to Mr Lawless, an increasing number of property listings has also played a role in weakening the market. "We're seeing advertised listing numbers rising which means there's more supply in the marketplace and of course that means buyers have more choice," he said. "This takes urgency out of the market and gives them [buyers] more ability to negotiate." The way the market is trending, Mr Lawless believes the slump will continue. "What I'm expecting to see is these clearance rates holding fairly low,"he said. "We're in a housing market downturn and I don't see any factors moving the market around." Investors evaporate from the market Property Buyers director Munro Donen attributes the market's slowdown to waning investor interest. "With changes to negative gearing and the capital gains tax, investors have evaporated from the market," he said. "What I believe is that sentiment needs to change and the current sentiment is very, very low." Despite the drop-off, Mr Donen said there was still movement within certain sectors of the market. "Good quality properties, well renovated in good locations are still attracting demand, but prices have definitely adjusted," he said. "The numbers might be low on the auctions, but there are still sales happening. "Around the one to two million dollars price range there's still activity and lot of competition." Window of opportunity Chief executive for industry and policy at the Housing Industry Association, Simon Croft, said the current lull in the housing market presented a chance for prospective buyers. "There's a window of opportunity for people to get into the market while the prices have seen some drops moderating off the market," he said. He said the lacklustre confidence has been noticeable when it came to display homes and enquiries about new home buildings as well. "This reflects a broader measure of confidence that we've seen in the market off the back of the three interest rate rises, also the Middle East conflict and the uncertainty that has caused," he said. He expects price growth to pick up once these factors play out. "Hopefully we can see some greater stability and see some return of confidence to the market," he said. [Image text:] AUO OPEN Saturda urday 6th Nove Sday 12th Octohe Oct&6