Mortgage brokers are navigating a more fragmented auction landscape as buyer confidence softens in Australia’s largest markets.
Uncertainty over mortgage rates, the war in Iran, and rising listings is weighing on demand at a time when many first‑home buyers and property investors are already stretched on borrowing capacity.
Sydney recently posted its weakest weekend auction result since December 2018, with one clearance rate dropping to just 31.5%, while Melbourne has slipped into the 30–50% range on some weekends.
“Sydney absolutely smashed to its weakest result since December 2018, which was during a period of significant price falls. Melbourne also hit extremely hard,” finance commentator Tarric Brooker told The Daily Telegraph, warning that “if these numbers continues both markets are in serious trouble.”
“Buyers are quite spooked at the moment about the economy and the forward direction of interest rates, what’s going on with the Iranian War and where that could lead to in terms of further economic deterioration,” SQM Research director Louis Christopher said.
Christopher expects sentiment to remain fragile until the Reserve Bank’s next meeting provides clearer guidance on the rate path.
PropTrack data show the national auction clearance rate has trended lower since February, when the Reserve Bank delivered the first of two interest rate hikes this year, with Melbourne easing from close to 70% to about 55% and Sydney slipping to around 50%.
In a realestate.com.au analysis, PropTrack executive manager of economics Angus Moore said the softening partly reflects high auction volumes, adding that “clearance rates have softened in the past month, particularly in Sydney… consistent with cooler market conditions and slowing price growth following the second rate hike.”
Yet those headline figures mask intense competition in more affordable pockets that remain popular with first‑home buyers.
PropTrack analysis highlights outer‑ring Melbourne suburbs such as Epping, Thomastown, Mill Park, and Mernda, where clearance rates have hovered around 80% between early March and April and median house prices sit well below $1 million.
Local agent Rob Stefanovski from Harcourts Rata & Co said “all properties are selling in a timely manner,” noting there is “a bit more demand than supply” in sub‑$1m markets.
In Sydney, the strongest auction results have been concentrated in tightly held lifestyle locations.
BresicWhitney acting CEO Will Gosse said, “there’s still some energy sub $1.5m, driven partly by first-home buyer initiatives and a sense… that this might finally be their opportunity to enter the market,” with clearance rates holding up in suburbs such as Bondi and Woollahra where supply is constrained and buyer conviction remains high.
Further north, Ray White’s Queensland auction team reports solid bidder numbers and resilient demand for renovated family homes under $2 million, while in Adelaide, Ray White chief auctioneer John Morris describes a market defined by “hesitation”, with auction market share sitting well below levels seen in more confident periods.
At a broader level, PropTrack senior data analyst Megan Lieu said auction results remain a useful lead indicator because “as auction rates tend to be quite responsive to changes in interest rates, they often provide an early indication of shifts in housing demand.”
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
