Homes selling at auction fall below 49 per cent as buyers step back

By Caleb Reed · 2026-08-27

How far clearance rates have fallen

The weighted average final clearance rate across the combined capital cities hit 48.9 per cent for the week ending 16 August 2026, down 20.9 percentage points from 69.8 per cent recorded in the same week a year earlier.^[1] That puts the national rate well below the 60 per cent threshold that has historically preceded downward pressure on dwelling prices.

Sydney's slide has been steeper. The city's clearance rate fell 19.0 percentage points compared with the same week a year earlier, when it sat at 70.5 per cent.^[2] A preliminary reading for the week ending 16 August showed the combined capitals rate nudging up to 56.5 per cent, its highest early reading in 12 weeks, though final figures confirmed the pull-back to 48.9 per cent once withdrawn and passed-in results were counted.^[3]

What is driving buyers to the sidelines

The Reserve Bank of Australia left the cash rate target unchanged at 4.35 per cent at its 11 August 2026 meeting, extending an already long stretch of elevated borrowing costs.^[4] Annual consumer price index growth came in at 3.5 per cent for July 2026, down from 3.8 per cent in June but still above the RBA's 2 to 3 per cent target band.^[5]

That combination has widened the gap between what sellers expect and what buyers will pay, pushing more prospective purchasers to the sidelines as the spring selling season approaches.

Auction volumes tell the same story. Just 1,276 homes went under the hammer across the combined capitals in the week ending 16 August 2026, 33.6 per cent fewer than the 1,921 auctions held in the same week a year earlier.^[1] Sellers are withdrawing listings rather than risk a public passed-in result.

What sub-60 per cent signals, and what sellers are doing instead

A combined capitals clearance rate below 60 per cent has historically been associated with vendors cutting reserve prices or pulling properties from auction as buyers wait for more favourable conditions. The current run of sub-60 per cent results raises the prospect of broader price softness heading into spring.

Sydney agent Matthew Hayson of Cobden Hayson said the auction format still works in a narrow set of circumstances. Hayson said success at auction comes with properties that have unique features highly sought after in the marketplace.^[6]

For everything else, agents are steering vendors toward private treaty. Buyer's agent Peter Kelaher said the switch carries its own risks, telling Domain that once a price is put on a property for private sale, people tend to offer significantly less than the listed price.^[6] Longer marketing campaigns are also adding to upfront costs for vendors who have already paid for auction preparation.

The RBA's next board meeting is scheduled for 23 September 2026, with July CPI data guiding market expectations on whether a rate move before year-end remains possible.

Caleb Reed

Caleb Reed covers breaking news and sport. He works to the rhythm of a story as it unfolds, and he is happiest when the facts arrive faster than anyone can spin them.