Surging numbers of homes are being passed in at auction as higher interest rates weigh on demand and the number of properties for sale hits highs not seen since 2021.
The national auction clearance rate last week was just under 57%, the lowest this year, with Sydney’s at 55%, Cotality data shows. The remainder includes both houses that did not sell at auction and houses withdrawn before auction.
The national rate had held at or near 66% from mid-2025 until January, excluding a typical end-of-year slip. The recent fall represents the biggest January-March slide in clearance rates since the pandemic.
A rate closer to 70% indicates a seller’s market.
Luke Bindley, director at Sydney’s Austin Buyers Agents, said homebuyers had lost confidence in the wake of two interest rate hikes and the war on Iran sending prices higher across the economy.
“A lot of auctions are passing in or not even making it to auction day,” he said. “I don’t think it’s even worth taking your property to auction, unless it’s really special, at this point in time.”
Properties in Sydney’s outer suburbs were still popular but the inner city had become a “buyer’s market”, Bindley said.
Sign up for the Breaking News Australia emailBack-to-back interest rate hikes have made it more difficult for buyers to afford a new loan.
The typical mortgage rate has risen to about 6%, from about 5.5% at the start of the year, meaning someone earning $107,000 could borrow about $535,000, or $25,000 less than they could have in January, Canstar has found.
Loan Market data suggests the number of first home buyers in the market fell by a quarter from early February to early March, after the first rate hike.
First-time hopefuls have stepped back even in more affordable areas where competition has been stronger, such as Brisbane’s western corridor, according to the Loan Market mortgage broker Justin Hewitt.
“In the last two or three months, there’s a bit of a market slowdown, and [I’m] seeing a little bit more of investors and upgraders,” Hewitt said.
About two-thirds of his customers were first home buyers in late 2025 but they now account for a bit over one-third, Hewitt said.
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