Australia spring auctions start weakly

The weak opening follows months of falling prices and policy changes that have hit investor demand. National home values are down 3.6% since March, with Sydney prices 7.1% below their peak, as higher borrowing costs and June tax changes weigh on sentiment. The federal government moved to scale back capital gains tax discounts and negative gearing benefits for existing properties, while the opposition has pledged to reverse those changes if elected.

There were pockets of resilience in Sydney and Melbourne, where preliminary clearance rates rose to 57.7% and 58.2% respectively, but smaller markets were far weaker. Brisbane cleared only 24.8% of auctions, its second-worst result of the year, underscoring how uneven the slowdown has become across the country.

Cotality expects activity to build later in September, with auctions forecast to rise to about 1,640 next week and 1,900 the week after. But the broader backdrop remains fragile: economists are still warning of another Reserve Bank rate hike before the end of 2026, which would add further pressure to affordability and could extend the decline in house prices.