The past few months have seen Australia’s auction market roar back to life.
Last week, the national final auction clearance rate recorded its highest level since July 2024, with just over 66% of homes taken to auction selling.
The following chart clearly illustrates the bounce in clearance rates, with higher auction clearances typically leading to higher prices.
Indeed, Cotality’s daily dwelling values index has bounced alongside the auction market, led by Sydney and Melbourne:
This weekend’s auction results crashed back to earth, albeit impacted heavily by the King’s Birthday long weekend.
Source: Cotality
The number of auctions held across the capital cities declined substantially, down 52% from the previous week, due to the King’s Birthday long weekend in several states.
The preliminary auction clearance rate also tanked, dropping to 63.8%. This was the lowest preliminary result this year, after two weeks of preliminary clearance rates of 70% or more.
The Sydney market, with a preliminary clearing rate of 59.9%, was the most significant drag on the headline figure. Sydney recorded its lowest preliminary clearance rate so far this year, disturbing the previous trend of a strengthening auction market.
Melbourne maintained its superior auction performances, with a preliminary clearance rate of 71.5%. However, it was the lowest preliminary clearance rate in Melbourne since the last week of April.
The futures market is tipping another 0.25% cut to the official cash rate in July, followed by two more rate cuts this year.
If true, this would take the official cash rate to 3.10% by year-end, down 1.25% from the beginning of the year.
For this reason, this weekend’s crash in the auction market is likely an anomaly brought about by the long weekend and will quickly reverse.
