Sydney's auction clearance rate dropped to 50.4% last week.
Buyers vanish from auction rooms
Sydney’s auction success rate slipped to 50.4% in the final week of March, Cotality data shows. Melbourne’s clearance rate fell to 54.2% in the same period. Nationally, preliminary figures compiled by Cotality put the auction success rate at about 60.9% — the weakest in almost four years, according to the Australian Financial Review.
That's a significant change. Attendance at open homes and the number of bidders at auctions are down sharply. Ray White reported the typical number of bidders at Sydney and Melbourne auctions fell by roughly one-third year on year in the last week of March.
Sellers are changing tactics — fast
Homeowners who traditionally tested the market under the hammer are increasingly selling early, privately or not at all. Victor Baralos, who sold his four-bedroom Croydon Park house a week after listing and well before his auction campaign ended, said he chose certainty over risk. "I could have let it run, but I said to myself, a bird in the hand is better than 10 in the bush," Baralos told The Guardian.
Baralos is no newcomer to auctions. He remembered bidding against 25 others when he bought his house in 2012; that sale went for $200,000 over the reserve.
His agent, Michael Poynting of Harris Tripp, encouraged the negotiated sale this time.
Sellers in expensive markets are reacting fast to changes in buyer behavior. Melinda Jennison, president of the Real Estate Buyers Agents Association of Australia (Rebaa), said agents are seeing more properties sold before auction day, plus a rise in post-auction negotiations after lots are passed in. Buyers' agents report more offers at lower levels than they were prepared to make in December.
Listings, sales and time on market
Despite the pullback from buyers, the supply picture varies across the country. Sydney and Melbourne still had solid numbers of properties listed, but finalised sales plunged from nearly 30,000 in each city in the December quarter to under 20,000 in each in the March quarter, The Guardian reported. Homes that were turning over inside a month late last year are now taking longer — about 33 days in Sydney and 35 days in Melbourne.
Smaller capitals tell a different story. Jennison said Brisbane, Adelaide and Perth are seeing fewer new listings, and in Perth properties typically sold in just nine days in March. "There's still more buyers than there are sellers," she said, explaining why some smaller markets haven't seen the same price pressure.
What's pushing buyers to the sidelines?
There are several drivers. Fuel prices have risen sharply, lifting the everyday cost of living. Consumer confidence has slumped to record lows in ANZ’s survey and open-home traffic has followed. On top of that, the Reserve Bank has signalled it may raise mortgage rates again — a message that makes buyers wary even if the RBA balances that risk against employment and growth outcomes.
Global uncertainty is a backdrop too. Reports such as the World Economic Forum’s series on 2025 flagged rising geopolitical risk and economic fragmentation, and that kind of uncertainty tends to make people pause before taking on a big financial commitment like a house.
Prices and forecasts
Falling buyer interest is already impacting prices in Australia's two biggest capitals. Early readings and market commentary suggest downward pressure on Sydney home values — the Financial Review has warned that Sydney prices could finish the year lower by about 5 per cent if current trends persist. Sellers in expensive suburbs are less likely to get the wide-open bidding they saw during the pandemic and the immediate post-pandemic rebound.
But that's not the case everywhere. Supply shortages in some regions are keeping price growth intact. Jennison pointed to the mismatch in many smaller markets where demand still outstrips supply, supporting quicker sales and firmer prices.
How agents and buyers are adapting
Buyers' agents have shifted strategy. Instead of preparing for competitive auction nights, some are making early offers or waiting to negotiate after a property is passed in. Vendors, meanwhile, are increasingly comfortable taking a negotiated bid to avoid the uncertainty of a light-auction room.
Sellers who opt for private sales or early negotiations are trading the chance of a premium auction result for speed and certainty. Michael Poynting, the Harris Tripp agent who handled Baralos's sale, backed that approach in the Sydney case, saying the negotiated outcome made sense for his vendor.
Broader economic ripple effects
The slowdown in transactions has knock-on effects.
Lower clearance rates and fewer sales reduce churn in the market, and that can damp activity in related sectors — from mortgage brokers to building and renovation trades. Lenders may tighten standards if they see prices soften, and that could further suppress buyer numbers.
Mortgage rates, petrol prices, and global uncertainty are all hurting buyer confidence. If the RBA raises rates again, servicing costs for new borrowers will rise. And those costs get passed along in people's calculations about whether they can afford to bid at an auction or make an early offer.
What to watch next
Watch clearance trends and open-home attendance. If bidder numbers keep falling and time on market lengthens in Sydney and Melbourne, price falls could spread. But if listings dry up in other capitals, those markets may stay tight and prices could hold.
There are no certainties. Some vendors will keep testing the market under the hammer. Others will prefer a quick negotiated sale. Investors who have been active recently might start to sell, adding to supply. Meanwhile, buyers' agents will keep hunting for value when the market softens.
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"I could have let it run, but I said to myself, a bird in the hand is better than 10 in the bush," said Victor Baralos, Croydon Park homeowner.
This article was created with AI assistance.
