The economic ripple effect of the Iranian War continues to be felt in Australia’s housing market, as more homes pass in at auction across the country’s capitals.
Buyers, according to experts, are increasingly taking a “wait and see” approach before pulling the trigger on property again, leaving those vendors who need to sell in no man’s land come auction day.
According to finance writer Tarric Brooker, Sydney recorded its weakest weekend auction result since December 2018, with a clearance rate of just 31.5 per cent.
Melbourne, meanwhile, recorded a 37.7 per cent clearance rate, down from 43.1 per cent the week before.
“Sydney absolutely smashed to its weakest result since December 2018, which was during a period of significant price falls. Melbourne also hit extremely hard, producing the weakest (non-Xmas or public holiday) performance since a lock-down hit September 2021. If these numbers continues both markets are in serious trouble,” he said.
Melbourne has recorded a clearance rate under 60 per cent for five weeks in a row, according to PropTrack auction data.
Fewer homes are selling at auction as clearance rates in Sydney and Melbourne take a hit. Picture: Sam Ruttyn
PropTrack’s preliminary figures suggest NSW recorded a clearance rate of 45 per cent, while Victoria’s sits higher at 51 per cent.
SQM Research director Louis Christopher said clearance rate figures for April are on track to be the lowest results recorded since 2020.
“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,” he said.
“It obviously has created a lot of uncertainty in the marketplace, not just in the housing market but in the equities market as well.”
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Buyer confidence is the lowest in Sydney, according to Mr Christopher. Picture: iStock
Mr Christopher said the situation for buyers would remain uncertain until the next Reserve Bank of Australia meeting in May.
“The RBA will be made to show its hand a bit more in the May meeting,” Mr Christopher said.
“Then we’ll have a better understanding in terms of what the Reserve Bank regards to be more important: is it to get on top of inflation or is it financial stability and full employment?
“They’re going to have to make some hard decisions soon.”
According to Mr Christopher, Sydney is “definitely the market experiencing the most buyer uncertainty”.
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Victoria’s auction market is having its toughest run since 2024. Picture: Asanka Ratnayake/Getty Images
Beyond Sydney and Melbourne, Ray White chief economist Nerida Conisbee said other capitals may be seeing changes for the better.
“There were signs of improvement in some markets, with Brisbane and Adelaide recording higher attendance levels, suggesting buyer engagement remains solid in these areas,” she said.
According to PropTrack, South Australia recorded a clearance rate of 65 per cent last week, while QLD’s sat at just 38 per cent.
Among Ray White’s auctions, Ms Conisbee said average active bidders remained stable at 2.4 per auction.
“Open home attendance held steady at 2.4 attendees per property nationally, broadly in line with last week,” she added.
“Auction volumes were lower, with 563 properties scheduled nationally, compared with 987 at the same time last year.”
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Ray White chief economist Nerida Conisbee
Ms Conisbee said the broader environment “remains uncertain”, with the recent interest rate increase and ongoing geopolitical tensions continuing to weigh on sentiment.
“However, this week’s data suggests the market may be adjusting to these conditions rather than weakening further,” she said.
“National clearance rates improved to 67.5 per cent, up from 55.2 per cent last week and slightly higher than the same time last year.”
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