Melbourne’s auction market has been hammered since the federal budget announced major property tax changes in May.
Melbourne’s dire clearance rate has revised down to 46.6 per cent, a 3.4 percentage point drop from the weekend as more failed sales emerged on Monday morning.
It is now the third weekend of four in June to record a clearance rate below 50 per cent, in what is the worst run for the clearance rate since Covid-era lockdowns in 2021.
In one shocking instance, the top bid for a failed auction was just half the price the same property was advertised with a year ago.
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The June 29 clearance rate is the third worst this year, outside of the January market shutdown, and could yet be revised down again when final figures are released on Wednesday.
Industry groups are also worried that it’s plunged almost 11 per cent from 57.5 per cent on Monday March 16, in one of the fastest declines since the turn of the millenium.
The timeline shows the slide started about two months before the federal budget and just before major concerns about changes to negative gearing and capital gains tax benefits for property investors began to make headlines.
Industry insiders are now comparing the auction market to Covid, when lockdowns meant buyers had to inspect homes via digital walk troughs, the global financial crisis and 2018 when Bill Shorten took negative gearing changes to an election amid the aftermath of a Royal Commission into the finance and banking sector.
PropTrack senior economic analyst Megan Lieu said while there had already been a decline in Melbourne’s clearance rate earlier in 2026, “there’s obviously been a further decline since the budget”.
Melbourne Clearance Rates This Year
June 29 – 46.6 per cent, revision pending
June 22 – 46 per cent, revised to 46.4 per cent
June 15 – 50.5 per cent, revised to 50.9 per cent
June 8 – 46.4 per cent, revised to 47.2 per cent
June 1 – 50.6 per cent, unrevised
May 25 – 50.3 per cent, revised to 51.4 per cent
May 18 – 52.6 per cent, revised to 51.4 per cent
May 11 – 51.8 per cent, revised 52.2 per cent
May 4 – 54.3 per cent, revised to 51.7 per cent
April 27 – 53 per cent, revised to 51.7 per cent
April 20 – 52.8 per cent, revised to 52.9 per cent
April 13 – 50.6 per cent, revised to 51.9 per cent
April 6 – 54.5 per cent, revised to 55.7 per cent
March 30 – 54.5 per cent, revised to 55.4 per cent
March 23 – 54.7 per cent, revised to 55.6 per cent
March 17 – 57.5 per cent, unrevised
Source: PropTrack
The May 12 budget from federal Treasurer Jim Chalmers announced changes to negative gearing, effectively limiting its use to new properties, and a shfit in capital gains tax from a flat 50 per cent deduction for homes owned for more than a year to an indexed version.
“It is the biggest change in property taxation in many years,” Ms Lieu said.
The analyst said with a variety of other factors it was now “hard to say where we go from here” and while there could be a recovery ahead, things could also soon get worse.
Professional auctioneer Andy Reid described the weekend as like “10 rounds in the ring against Mike Tyson”, watching as seven auctions he was scheduled to call dropped to four as two sellers pulled out — and one sold early.
Of the four that proceeded, only one sold under the hammer — though Mr Reid said having the other three pass in with a genuine bid had at least given the owners a choice of locking in a buyer for an unconditional sale.
Australia’s recently crowned top auctioneer Greg Brydon’s Apollo Auctions handled 12 auctions over the weekend, most in the east and south east, and sold just over a quarter.
Jim Chalmers’ May budget has been widely panned for its impact on the housing market.
In one instance a Mornington Peninsula home that had been listed with a $15m-$16m price last year, and went to auction with a $9m-$9.9m asking price, got a top bid of just $7.25m.
Mr Brydon said many of those selling at the moment had likely commenced the process in April and were just getting to the market now, meaning many were comparing their prospective price to figures from earlier in the year that no longer had any relevance.
“Outside of Covid, this is the most uncertain the world more generally has been in my memory, and that’s creeping into the market.
Property Investment Professionals of Australia chair Cate Bakos said she was taking the occasional Saturday off at he moment.
“And that’s not meant to happen,” Ms Bakos said.
The buyer’s agent compared the market today to those experienced during the GFC, Bill Shorten’s ill-fated negative gearing election campaign and the Covid lockdowns of 2020 and 2021.
Professional auctioneer Andy Reid described the weekend’s auctions as like “10 rounds in the ring against Mike Tyson”.
Despite this, Ms Bakos said she was starting to get more calls from prospective buyers which gave her hope the market might not drop much further now.
Describing the auction market as “tentative and difficult” she said the challenge for auctions would likely rise even higher in spring as more homes were listed for sale and Melbourne had to grapple with significant changes to how auctions were conducted.
This includes the mandatory disclosure of reserve prices seven days before the home goes under the hammer which commences from October 1.
Her tip was that auction numbers would drop as a result of the changes and poor conditions, and potentially enough that they became less relevant as a gauge of how the market is travelling.
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