Australia’s spring property market has started on weak footing, with fewer than half of homes taken to auction selling as higher interest rates weigh on buyer demand.
The preliminary capital-city auction clearance rate fell to 48.2% last week, its lowest level in three months and the second-weakest result of 2026.
There were 1,223 auctions across the capital cities, down 12.8% from the previous week and almost 48% below the number held a year earlier.
The slowdown follows the Reserve Bank of Australia’s decision to lift the cash rate by another 25 basis points to 4.60%, its highest level in around 15 years.
Unsold homes pile up
Separate data show the number of homes available for sale nationally has risen to around 276,000, up 21.6% from a year earlier.
Importantly, the increase is not primarily being driven by a surge in new listings.
Instead, properties are remaining unsold for longer as buyers gain bargaining power and vendors struggle to achieve expected prices.
Listings sitting on the market for more than 180 days are more than 10% higher than a year ago.
Distressed sales are also increasing, with almost 4,900 properties classified as distressed during September, up around 29% year-on-year.
The weakness adds to evidence that Australia’s housing correction is broadening after national home values fell for a sixth consecutive month in September.
With borrowing capacity already reduced by four RBA rate increases this year, economists are increasingly warning that capital-city prices could decline 10%-15% from their peak before the downturn runs its course.
