Auction clearance rates have historically been a strong leading indicator of dwelling value growth, especially in major capital city markets.
As CBA shows below, this year’s auction clearance rates have tracked well below those of 2025 and 2024, reflecting the sharp decline in the nation’s dwelling values.
Dwelling values across the five major capital cities have fallen by 6.6% since their peak in early April and are only 2 percentage points away from recording the sharpest price correction in more than 40 years.
As we know, the Reserve Bank lifted the official cash rate to 4.6% last week, its highest level in 15 years. Financial markets have also priced in at least one more hike, with the possibility of a second next year, which would take variable mortgage rates to nearly 7%.
The impact on the auction market has been immediate, with Cotality reporting a preliminary auction clearance rate this weekend of only 48.2%, the lowest outcome since the week ending June 21st (47.4%) and the second-lowest preliminary reading through the year to date:
Source: Cotality
“Last week’s rate hike has probably played a role in the weaker auction outcome, with prospective buyers facing reduced borrowing capacity and ongoing confidence woes”, noted Cotality’s research director, Tim Lawless.
“Low clearance rates outside Sydney and Melbourne have been a drag on the national result, with only 25.6% of Brisbane auctions reporting a successful outcome so far, alongside 41.5% in Adelaide and 41.7% in Canberra. By comparison, the early clearance rate has held above the 50% mark in Sydney and Melbourne, at 55.7% and 50.6% respectively”, Lawless noted.
Indeed, the price weakness has spread beyond Sydney and Melbourne to the mid-sized capitals: Brisbane, Perth, and Adelaide:
Regardless, the latest rate hike from the Reserve Bank – the fourth of 2026 – should ensure that the price correction continues into 2027, with records likely to be broken before Christmas.
