Australian home auction clearance rates hit six-year low

Australia's property market is showing signs of significant cooling, with auction clearance rates in major capital cities plummeting to their lowest level in six years. Preliminary data for the week ending June 21 reveals that only 47.4% of homes listed for auction found buyers, a stark indicator of the current market sentiment.

The downturn is widespread, affecting major hubs like Sydney, where the clearance rate was 47.4% and 166 homes were withdrawn from auction. Melbourne saw 50.6% of its auctions succeed, while Brisbane's rate was a mere 33.3%. Perth and Adelaide reported 40% clearance rates, and Canberra stood at 47.1%. These figures echo the conditions seen in April 2020, at the onset of the COVID-19 pandemic.

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Auction volumes look set to ease further over the coming weeks, partly a seasonal trend but also likely in response to weaker selling conditions.

Economists anticipate a further decline in auction volumes. Annabelle Mezieres, an economist at Cotality, noted that seasonal trends and weaker selling conditions are contributing factors. Nearly a quarter of scheduled auctions were withdrawn, and almost half sold before the auction date. This trend follows the Reserve Bank's decision to hold interest rates at 4.35%, a move that, while expected, still leaves many mortgage holders facing higher repayments.

The housing market is now a central focus in parliament, with debates scheduled on the government's proposed overhaul of the capital gains tax discount and negative gearing. Opposition figures criticize the changes as unfair, while the government maintains they will aid first-home buyers. However, some senators argue the market is fundamentally broken, with affordability remaining a critical issue for many Australians.

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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.