The nation’s auction market is ending 2025 with a whimper.
The monthly average final auction clearance rate across the combined capital cities declined to 64% in November, down from the recent peak of 70% in September.
Sydney and Melbourne have driven this decline in auction clearances.
Sydney’s final auction clearance rate fell to 63% in November, down from a recent peak 72% in August.
Melbourne’s final auction clearance rate also fell to 63% in November, down from a recent peak of 69% in July.
The slump in auction demand has been replicated by Cotality’s daily dwelling values index, where 28-day price growth have stalled across Sydney and Melbourne.
Sydney’s 28-day dwelling value growth has decreased from a recent peak of 0.9% on a rolling 28-day basis to just 0.3% at present. Melbourne’s growth has slowed from a recent peak of 0.7% to just 0.2%.
The weekend’s auction results were more of the same, with the preliminary clearance rate nationally slowing to just 63.5%, the lowest result since the same time last year.
Source: Cotality
Sydney’s preliminary clearance rate eased by 3.6 percentage points to 61.5%. This was the lowest result since the week ending 8 June.
Melbourne’s preliminary clearance rate came in at 65.5%, down 3.0 percentage points to be the lowest early clearance rate since the last week of September (which coincided with the Melbourne Cup Racing Carnival).
Clearly, the removal of ‘fear of missing out’ (FOMO) from the market stems from expectations that the Reserve Bank of Australia (RBA) will no longer cut interest rates.
BresicWhitney chief executive Thomas McGlynn told The AFR that the changed expectations on interest rates have stunted buyer demand.
“I believe buyers are being quite picky at the moment in terms of what they want to buy”, McGlynn said. “With interest rates not coming down and the cost of living high, they don’t want to compromise, and I think that’s going to lead to a dip in the clearance rate again next week”.
Louis Christopher, managing director at SQM Research, added that “the middle and the top end of the market is struggling”.
“More and more people are sitting on the sidelines, they’re watching, but an increasing number are being more cautious compared to the start of spring”, he said.
“Affordability has been a key factor, if it wasn’t for the 5 per cent deposit scheme, the first home buyers wouldn’t be looking at the market at all”.
