National auction clearance rates in Australia drop to under 50 per cent for third week in a row after Labor’s controversial tax changes
Less than half the properties up for auction around Australia were successfully sold for the third week in a row.
New data from Cotality found 49.8 per cent of national auctions were successful last week, from June 29 to July 5, up from 49.2 per cent the week prior.
Cotality’s Asia-Pacific executive research director Tim Lawless said that while this week’s figures were a drop, they weren’t the lowest we’ve seen this year.
Last week’s clearance rates in Sydney and Melbourne were the lowest seen in more than six years and almost five years, respectively.
‘It’s pretty rare to see clearance rates this low,’ Mr Lawless said, the ABC reported.
‘Clearance rates persistently holding this low shows a mismatch between buyer and seller expectations.
‘It’s probably another indicator of the market going through a phase of negative movements.’
Mr Lawless attributed large parts of the decline to the tax changes in the Federal Budget, the resulting lull in investment activity, as well as interest rate hikes, and issues around affordability.
Auction clearance rates were below 50 per cent around Australia for the third week in a row
June also saw the biggest monthly fall in national property value since 2022
Cotality’s data found June was the largest monthly fall in national housing values on record since 2022.
It followed the Budget on May 12, in which Treasurer Jim Chalmers announced changes to negative gearing and capital gains tax that made it less profitable for investors to buy real estate.
He defended this as an effort to unlock housing for first-home buyers by shifting the property market away from a tool to grow wealth and towards housing as shelter.
All the above has resulted in a ‘softer’ market.
‘We’re seeing advertised listing numbers rising which means there’s more supply in the marketplace and of course that means buyers have more choice,’ Mr Lawless said.
‘This takes urgency out of the market and gives them [buyers] more ability to negotiate.’
Melbourne recorded the highest clearance rate this weekend at 54.5 per cent, followed by Sydney with 51.6 per cent.
Canberra’s auction success was 50 per cent and Adelaide’s was 45.7 per cent.
Brisbane’s clearance rate suffered a massive drop from last week’s 39.3 per cent to 23.8 per cent.
It’s an even bigger drop when the figure is compared to the Queensland capital’s clearance rate this time last year, which sat at 69.6 per cent.
The average clearance rate for Australian capital cities at the time ranged between 63 and 70 per cent.
