TLDR
Australia's combined capital auction clearance rate dropped to 48.2 per cent last week, its lowest in three months, after the Reserve Bank lifted the cash rate to 4.60 per cent. Fewer than 1,250 auctions were held, and nearly 277,000 homes sat unsold nationally in September.
What the rate rise costs at the front door
A couple borrowing $800,000 at a variable rate tied to the cash rate now faces repayments roughly $120 a month higher than before the Reserve Bank's September move. The RBA lifted the cash rate by 25 basis points to 4.60 per cent on 29 September 2026[1], its fourth increase of the year. The auction market felt it almost immediately.
Clearance rate sinks below half
The preliminary auction clearance rate across the combined capitals fell to 48.2 per cent last week, the lowest reading since late June and the second-lowest preliminary figure recorded this year.[2] When more than half the homes taken to auction come back unsold, buyers are setting the terms, not vendors.
Tim Lawless, Research Director at Cotality, said the two biggest markets were pulling down the national figure. "Sydney and Melbourne have been a drag on the national result," Lawless said.[2] Both cities carry the highest median prices in the country, so a 25-basis-point move lands harder on a $1.4 million Sydney mortgage than on a $600,000 Adelaide one.
Volumes collapse heading into spring
Spring is meant to be the season when vendors test the market in numbers, listing on the expectation that buyer demand will be at its seasonal peak. That script is not playing out in 2026. Just 1,223 auctions were held across the capitals last week, 12.8 per cent fewer than the prior week and down 47.5 per cent on the equivalent week in 2025.[2]
That 47.5 per cent volume drop is worth sitting with. Vendors are not just struggling to sell; many are choosing not to try, pulling listings entirely rather than accept a price they regard as too low. Fewer transactions and more standoffs is what a market under that kind of rate pressure tends to produce.
Unsold stock and distressed listings pile up
National residential listings rose 2.6 per cent over September alone to reach 276,839 dwellings, a 21.6 per cent increase on September 2025, according to SQM Research.[3] That is a large pool of property sitting on the market without a buyer.
SQM Research recorded 4,872 distressed listings in September, up 29.2 per cent year-on-year.[3] Louis Christopher, Director of SQM Research, said the composition of the increase matters. "The bulk of the increase is property that has been on the market for one to six months and hasn't sold," Christopher said.[3] Properties lingering that long typically belong to owners who listed at a price the market has since rejected, or who are under mortgage stress and cannot hold on indefinitely.
What spring looks like from here
For buyers, a clearance rate under 50 per cent is the clearest sign in months that negotiating power has shifted. Vendors who listed expecting a competitive auction are now fielding lower offers, and some are accepting them.
For sellers, timing has become genuinely difficult: list too early into a softening rate environment and the price achieved may disappoint; wait too long and the spring window closes. The RBA's next scheduled cash rate decision falls in November 2026.
KEY TAKEAWAYS
SOURCES & CITATIONS
FREQUENTLY ASKED QUESTIONS
What does an auction clearance rate below 50 per cent mean for buyers?
Why did auction volumes fall so sharply compared with last year?
What are distressed listings and why are they rising?
Gavin O'Malley writes about property and housing. He spends his time at auctions and on building sites, and is more interested in what buyers and builders are actually paying than in what the forecasts say.
