Fewer Auctions, But A Higher Clearance Rate Doesn’t Yet Signal A Turnaround
The week ending 18 October brought two contrasting auction signals: fewer homes went under the hammer, but a greater share of reported results were successful. Cotality recorded 1,423 auctions across the combined capitals, down 18.6% on the previous week and 45.8% on the same week last year. The preliminary clearance rate rose to 51.2%. That lift is encouraging for vendors who found a buyer, but the sharp drop in activity and wider housing-market headwinds make it too soon to call a recovery.
What This Means For
First Home Buyers
Fewer auctions can mean fewer chances to compete at auction, but the higher preliminary clearance rate suggests some homes are still drawing enough demand to sell. Buyers should not assume that a softer market means every property is negotiable: location, condition and price still matter. The RBA raised the cash rate to 4.60% on 29 September, so borrowing capacity and repayments remain central to a realistic budget.
Investors
Auction results are only one part of an investment decision. With Cotality’s September Home Value Index showing six consecutive monthly national falls, investors may find less upward price momentum than earlier in the year. That does not establish that a particular property is good value. Compare expected rent, ongoing costs and finance at current rates, and remember that a preliminary clearance rate says nothing about rental demand or an individual property’s likely return.
Up-Sizers
A quieter auction week may give some buyers more time to assess options, while a higher clearance rate suggests desirable properties can still attract competition. For households selling and buying, the key issue is the relative performance of the two properties: a change in the price of your current home does not automatically mean the next home has moved by the same amount. In Victoria, the new disclosure rules also make the published reserve a more visible reference point for auction buyers.
Auction Activity Across Select Markets
Melbourne accounted for most of the weekly volume fall. It recorded 500 auctions, down from 703 the previous week and 1,142 a year earlier. Its preliminary clearance rate lifted to 56.2%, the strongest among the large auction markets in this report. Victoria’s reserve-price disclosure requirements applied to auctions and fixed-date sales from 16 October, and the volume decline coincided with their introduction. That timing is notable, but one week of results cannot show that the new rules caused sellers to postpone or change their campaigns.
Sydney also had fewer auctions than a year ago: 574, against 1,079. Its preliminary clearance rate rose to 54.6%, still below its spring-to-date average of 55.5%. Brisbane presented a less convincing picture: its rate improved to 31.5%, but only 35 of 111 reported results were successful, and the rate remained well below the same week last year. Adelaide’s auction count was higher year-on-year, yet its clearance rate fell to 36.4%. These differences underline why a national average should not be treated as a verdict on every local market.
Key Market Indicators
| Indicator | Latest | Comparison |
|---|---|---|
| Combined-capital auctions | 1,423 | Down 18.6% week-on-week; down 45.8% year-on-year |
| Preliminary clearance rate | 51.2% | Up 2.4 percentage points on previous preliminary result |
| Spring-to-date preliminary clearance average | 52.0% | Winter average: 52.3% |
| National Home Value Index | Down 1.1% in September | Sixth consecutive monthly fall |
| RBA cash rate target | 4.60% | Raised 0.25 percentage points on 29 September |
The clearance-rate improvement needs to be read alongside the shrinking auction pool. A smaller group of properties going to auction can produce a stronger success rate without showing that overall buyer demand has strengthened. The spring average also remains slightly below winter’s, while falling home values and higher rates point to affordability and borrowing constraints. Taken together, the data suggest a selective market, not a broad-based surge in competition.
Questions We’re Hearing
Does a clearance rate above 50% mean the market is turning?
Not on its own. The 51.2% figure is preliminary and based on 1,084 collected results; it is up on the previous preliminary reading, but the spring average is 52.0% and auction volumes are far below last year. A sustained change would need to show up across more weeks and alongside other measures of demand.
Did Victoria’s new reserve-price rules cause the fall in auctions?
The timing overlaps: Melbourne’s auction count dropped as the rules began to apply. But the report establishes coincidence, not cause. Sellers may have adjusted campaign timing, while broader conditions and seasonal choices could also matter. Further weeks of data will be needed to assess whether the change persists.
The Orchard Lending View
The clearest message this week is that auction activity remains subdued even as the preliminary success rate improved. The rise is a positive signal for homes that did reach auction and attracted a buyer, but it does not outweigh the substantial year-on-year volume decline or establish that demand has turned a corner.
Broader conditions help explain the caution. Cotality reported national home values fell again in September, while the RBA’s late-September rate increase adds pressure to household borrowing capacity. These indicators are not a direct explanation for any single auction outcome, but together they make it harder to interpret one stronger weekly clearance reading as a market-wide recovery. In Victoria, the disclosure change adds another possible influence on campaign timing, one that remains unproven.
For buyers and sellers alike, the useful takeaway is to look past the headline rate. Results vary by city and property, and a smaller auction count is not the same thing as fewer homes for sale overall. Pricing, comparable sales and finance readiness remain more useful guides than a single week’s national result.
What We’ll Be Watching Next Week
Cotality has approximately 1,240 auctions scheduled across the combined capitals for the week ending 25 October, including 489 in Melbourne. These are scheduled auctions, not a forecast of completed sales. We’ll be watching how many proceed, whether the preliminary clearance rate holds up, and whether Melbourne’s lower volume continues as the reserve-disclosure rules bed in. Those results may help separate a short-term adjustment from a more persistent change in seller behaviour.
If you’re weighing up a purchase, sale, refinance or move, contact Orchard Lending to discuss the finance considerations involved.
