Auction clearance rates in Australia's capital cities have plunged to a six-year low, with fewer than half of homes finding buyers in the latest weekly data. Preliminary figures from property data firm Cotality show that only 47.7% of homes sold at auction in the week ending Sunday, 21 June, matching levels last seen in April 2020 at the onset of the COVID-19 pandemic.
Capital City Breakdown
The weighted average clearance rate of 47.7% masks significant variation among cities. Sydney recorded a clearance rate of 47.4%, with 166 homes withdrawn from auction. Melbourne fared slightly better at 50.6%, while Brisbane saw just 33.3% of homes sold. Perth and Adelaide both posted 40% clearance rates, and Canberra achieved 47.1%.
Market Conditions and Future Outlook
Annabelle Mezieres, an economist at Cotality, expects auction volumes to ease further. "Auction volumes look set to ease further over the coming weeks, partly a seasonal trend but also likely in response to weaker selling conditions," she said. She noted that nearly 24% of scheduled auctions were withdrawn and almost half (48%) sold before going under the hammer.
RBA Policy and Housing Debate
The weak auction results come less than a week after the Reserve Bank of Australia (RBA) held interest rates steady at 4.35%. The RBA has already implemented three consecutive rate rises, and Governor Michele Bullock indicated that another increase remains possible due to persistent price pressures. Housing policy is set to dominate parliament this week, with lawmakers debating the government's proposed overhaul of capital gains tax discounts and negative gearing, as outlined in the May federal budget.
Political Reactions
Jane Hume, the deputy Liberal leader, criticized the Labor government's plans on Monday, calling them "entirely unfair." She accused politicians of using negative gearing to build their own wealth while pulling the ladder up behind them. In contrast, Social Services Minister Tanya Plibersek stated that the government does not expect house prices to fall but aims for slower growth, emphasizing that the changes are designed to help first-home buyers.
Greens Senator David Shoebridge described the auction clearance results as evidence of a "broken" market. "Yes, no one is selling, but no one is buying because it doesn't matter what Labor does with its messaging, their changes are not fixing the fundamental dynamics that people cannot afford a house in this country," he said.
