Aidan Devine
Updated 11 Jun 2026, 4:34pm
First published 11 Jun 2026, 4:29pm
Sydney’s housing market has slumped to levels last seen nearly eight years ago when the city was in the throngs of its last major real estate downturn.
Realestate.com.au data has revealed only 41.3 per cent of Sydney homes scheduled to go to auction last week actually produced a sale, with many homes getting passed in without attracting a single bid.
The bulk of the homes that failed to sell were withdrawn from auction before bidding could commence – normally an indicator of lacklustre demand from buyers.
It’s a dramatic change in fortunes from just last year when over 70 per cent of the homes that were going under the hammer over most weeks sold.
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Registered bidder numbers are down. Picture: Monique Harmer
Auctioneer Clarence White, the director of auction group Menck White, said conditions haven’t been this weak since 2018 – Sydney’s most recent, prolonged, market downturn. Prices fell by nearly 11 per cent that year.
“It’s a very price cautious buyer market right now,” Mr White said, adding that many buyers were wary that whatever price they paid at the moment could be higher than what other buyers could be paying later this year.
“It’s a bit like chasing a slippery soap down the hill. Buyers are trying to figure out where prices are going to land,” he said.
Property analyst Jeremy Sheppard, head of research at SuburbData, said higher interest rates, coupled with uncertainty over the economy and recent tax reforms, were pushing down prices.
“Buyers are spooked by the threat of more interest rate hikes,” he said.
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Buyers have become a lot more price sensitive and demand has been higher at the bottom end of the market.
It comes as new figures showed Sydney house price falls dragged property values down by an average of $75,000 in the past three months – the second-largest nominal quarterly drop ever recorded.
Primara and HomeLoanRates.com.au analysis of ABS median dwelling data revealed Sydney’s median house price dropped from $1.56m to $1.485m over the March quarter.
This was the largest nominal fall in prices behind only a $100,000 fall recorded in September 2017 – the start of the same financial regulatory crackdown that pushed down prices in 2018.
In percentage terms, the March quarterly decline was 4.8 per cent – the largest percentage fall in seven years.
August 2018 file imagery shows the Royal Commission into misconduct in the banking industry. Mr White said conditions were similar to 2018. Picture : David Geraghty
Primara head of research Peter Drennan said the Sydney market was at a turning point.
Recent price falls could be explained by higher interest rates and lower buyer demand, Mr Drennan said.
“The Sydney market is at an inflection point,” Mr Drennan said. “Demand has pulled back sharply, sales are down significantly across both houses and apartments, and two (interest) rate rises are still working their way through the market. A third in May means quarter two is unlikely to look any different.”
Mr White said one of the reasons the auction clearance rate was so low was that vendor expectations had yet to catch-up, catch up to the reality of the changed market. “A lot of sellers haven’t fully digested the price changes. They still think they will be able to get the kind of prices we saw a few months ago.”
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