Australia’s housing market continues to lose momentum as demand fades
The latest data shows that Sydney’s and Melbourne’s housing markets are decelerating, dragging down national price growth.
March’s auction clearance rates from Cotality were the lowest of the year for both Sydney and Melbourne.
Only 56% of homes auctioned in Sydney in March sold, down 7 percentage points from March 2025.
In Melbourne, only 57% of homes taken to auction in March sold, down 5 percentage points from March 2025.
The Easter long weekend’s auction results showed further deceleration, with Cotality reporting a preliminary clearance rate of only 55.5% across the combined capital cities, the lowest result since July 2022 and the first time the preliminary clearance rate has been below the 60% mark since December 2022.
Source: Cotality
Only 53.4% of auctions in Sydney reported a successful result based on early numbers, the lowest preliminary clearance rate since the first week of July in 2022.
Melbourne’s preliminary clearance rate of 58.3% was the lowest since September 2024.
Cotality’s daily dwelling values index is also registering solid price declines in Sydney and Melbourne, which are pulling down the national average.
Over the past 28 days, Sydney’s dwelling values have declined by 0.2%, whereas Melbourne’s have fallen by 0.3%. Weakness in these two key markets has reduced growth across the five major capital city markets to only 0.4% over the past 28 days.
As illustrated below by Justin Fabo from Antipodean Macro, high volumes of for-sale listings are dampening price growth across Sydney and Melbourne, as buyers are spoiled for choice and face little competitive pressure.
Given that financial markets are tipping at least two more 0.25% hikes in the official cash rate to at least 4.6% this calendar year, it is fair to assume that Sydney and Melbourne home prices will continue to fall.
Indeed, SQM Research’s latest dwelling price forecasts for 2026 suggested that if the official cash rate rises above 4.5% (“Scenario 2” below), then Sydney and Melbourne will record dwelling price declines of between -4% and -9% this year:
By comparison, price growth across the other major capitals is projected by SQM Research to remain solid in 2026, in part reflecting their relative scarcity of for-sale listings.
