Auction numbers slump as home buyers remain cautious

AUCTION success rates have dropped to a fresh post-pandemic low as would-be home buyers sit on their hands in the falling property market.

Research group Cotality's latest results show clearance rates have continued to slide as the number of auctions rises nationwide.

The combined preliminary clearance rate across the capital cities fell to 44 per cent through the week, the weakest result since the early COVID-19 pandemic period of April 2020, the property data firm said on Sunday.

While the 1188 auctions held was an 11 per cent increase on the previous week, the number was still down more than 40 per cent on the same time in 2025.

Sydney's clearance rate dropped below half for the first time in spring, showing the slowdown is hitting Australia's most expensive market hard.

But there was an even sharper fall in Melbourne, where the clearance rate plummeted 11 percentage points to 47.8 per cent, the lowest mark since September 2021.

All five capital cities that recorded a preliminary clearance rate had falls, Cotality said.

Auction clearance rates are considered a key leading indicator for property prices with any result below 60 per cent pointing to a falling market.

The slump was indicative of a market hampered by rising interest rates in which buyers were facing little competition, even compared to six months ago, Ray White executive Thomas McGlynn said.

"While this time of year traditionally brings a greater sense of urgency to the market, we're not seeing that translate into stronger buyer participation," McGlynn said.

"Buyers are still making decisions but they're doing so with a different level of urgency and a greater willingness to walk away."

The auction clearance downturn has been occurring at the same time as investors leave the property market in droves.

There has been a 30 per cent fall in investor lending, the Australian Bureau of Statistics reported on Wednesday, driven in part by curbs to negative gearing and the capital gains tax discount on existing properties.

The share of total home loans going to owner-occupiers has climbed to 68 per cent from 59 per cent before the May budget.

Cotality's price data for October shows national median home values have fallen 6.7 per cent since their March peak, while Sydney values are down more than 10 per cent.