Exclusive auction figures reveal clearance rates across Australia’s capital cities slumped right after the federal budget was delivered and have been on a downward spiral since.
New data from PropTrack reveals the downturn has been most pronounced in Sydney, where the clearance rate plunged to just 39 per cent on May 17 — the first Saturday after the budget was handed down — while 285 auctions were withdrawn from the market.
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Auctioneer Clarence White in action. Picture: David Swift.
Nationally, just 47 per cent of properties scheduled for auction sold last Saturday, marking the weakest result since May 2020, excluding the traditional Christmas-New Year holiday period.
The figures come as concerns grow that the government’s proposed changes to negative gearing and capital gains tax concessions are already weighing on buyer confidence and investor sentiment.
A house for auction in Hunters Hill. Picture: Sam Ruttyn.
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The PropTrack data shows Brisbane’s auction market has deteriorated rapidly since the start of the year.
The city began 2026 recording clearance rates above 60 per cent but fell sharply ahead of the federal budget.
On the Saturday immediately after the budget, Brisbane recorded a clearance rate of just 36 per cent, with 16 auctions withdrawn. The following week, the city’s success rate fell even further to 35 per cent — its lowest result of the year at that point.
Last Saturday, Brisbane an ever weaker result, with just 30 per cent of properties selling under the hammer — and the lowest since the week of March 9, 2025.
Perth also recorded one of its weakest auction results of the year on May 17, with a clearance rate of just 33 per cent.
Brisbane’s auction clearance rate is its lowest since the pandemic.
In Adelaide, clearance rates that had consistently tracked between 70 and 80 per cent earlier in the year dropped to 58 per cent on May 24, while the city also recorded its highest number of withdrawn auctions for the year.
Melbourne’s market has been comparatively stable but still finished May with its weakest clearance rate of 2026 at 51 per cent.
REA Group economic analyst Luc Redman said the clearance rates were the lowest across most capital cities since the start of the RBA’s hiking cycle in 2022.
“Usually, this tells us is that there is a mismatch between buyer and seller price expectations, which, from a buyer’s point of view, means that the property should be valued lower than what the seller considers as the reserve price,” Mr Redman said. “That can be an early indication of downward pressure on prices.”
Mr Redman said the fall in buyer confidence around the federal budget had contributed to the slowdown, but the increases in interest rates were the primary factor for prices slowing.
REA Group analyst Luc Redman . Picture: Supplied
“The tax reforms will likely only have a small impact on prices over the next 12 months,” he said.
“Due to the structure of the reforms with grandfathering and broad changes across assets, the impact of negative gearing and capital gains tax on prices will likely see only a marginal decline relative to if the changes hadn’t occurred.
“This is because the fundamentals of supply and demand remain. Currently, there is still a shortage of supply in the market, and as has been seen before, that mismatch tends to drive price growth.”
Mr Redman said the rise in auction withdrawals was also concerning.
“It tends to (happen when) the level of interest from buyers isn’t strong enough to warrant an auction,” he said.
“These have historically been correlated with the increases in the cash rate, which has meant that withdrawals were high at the start of the interest rate increases and also in the 2022 hiking cycle.”
Ray White NSW|ACT head of auctions David McMahon said recent sales evidence was forcing the market to establish a new baseline.
“In the current environment, our message to vendors remains consistent: any auction attracting two or more registered bidders should be viewed as a positive sign, as genuine competition continues to drive outcomes,” Mr McMahon said.
“Buyer behaviour remains cautious, with many reassessing their financial position in light of recent market and economic changes”.
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