A note on Sydney’s falling auction clearance rates, the new price-guide laws, and why the three-week campaign no longer does what it once did.
For most of the past two decades, the auction was simply the default. You listed, you ran a three-week campaign, you gathered a crowd on a Saturday morning, and more often than not the property sold under the hammer. It was fast, it was public, and in a rising market it flattered everyone involved. That era is closing — and the numbers are telling the story plainly.
Across Sydney this autumn the preliminary clearance rate has been sitting around 51 per cent, down from roughly 68 per cent at the same point last year. Melbourne is a little firmer near 55 per cent; the combined capitals are tracking close to their lowest levels of the year. By early March, SQM Research already had Sydney under 46 per cent — well below the 53 per cent average of the four post-pandemic years. These are not the numbers of a healthy auction market. They describe a market in which roughly half of everything taken to auction is not selling on the day.
The numbers, read plainly
A clearance rate is simply the share of auctioned properties that sell. Above 70 per cent and the market is competitive; below 60 and buyers have become cautious while vendors are no longer getting the prices they expect. We are now well under that line — and the prestige end, the part of the market that matters most across the Eastern Suburbs, is feeling it first. Cotality’s figures have the top quartile of values falling around 2.7 per cent a quarter in Sydney. The catalysts are familiar enough: three consecutive interest-rate rises lifting the cash rate to 4.10 per cent, proposed changes to negative gearing and capital gains tax, and a broad loss of confidence. None of that is mysterious. What deserves more attention is what has shifted beneath the surface.
We have been here before
It is worth remembering that a falling clearance rate is a leading indicator, not a footnote. It tells you where prices are heading several months before the price data confirms it.
In late 2018, during the credit-tightening correction that followed the Banking Royal Commission, Sydney clearance rates fell into the low-to-mid 30s. Values ultimately fell more than 14 per cent from their mid-2017 peak — the sharpest downturn the city had seen in two decades. In 2022, when the Reserve Bank began lifting rates in earnest, clearance rates settled around the same low-50s level we are seeing today, and Sydney values fell roughly 8 per cent across the cycle that followed.
Three downturns, one pattern
| Period | Sydney clearance | What followed |
|---|---|---|
| 2017–19 | low-to-mid 30s | Sydney values fell ~14% from their peak |
| 2022 | around 50% | values fell ~8% over the cycle that followed |
| 2026 now | around 51% | top-quartile values already falling ~2.7% per quarter |
The pattern is consistent. When the clearance rate falls and stays there, price follows. The question for any owner thinking about selling is not whether the market has turned — it has — but how to sell well inside it.
What is genuinely different this time
Here is the part few are discussing honestly. This downturn has arrived at the same moment as the most significant change to how property is priced and advertised in a generation.
From this year, the NSW Government has moved to require a price or price guide on every listing, backed by a Statement of Information setting out how that estimate was reached — comparable sales, the suburb median, the lot. Penalties for underquoting rise from $22,000 to $110,000, or three times the agent’s commission, whichever is greater. Fines for dummy bidding double. An agent can no longer advertise a guide below an offer the vendor has already rejected. Fair Trading has already issued “please explain” notices to twenty-five agencies.
For decades, the auction worked partly because the price guide could be used as bait. Quote low, fill the room, manufacture competition, and let the auction do the rest. That lever is now being taken away. Without underquoting, the auction loses much of the theatre that made it reliable in a soft market. When buyers can see, in writing, what a property is genuinely worth, fewer of them turn up to bid against a number that was never real. An honest market is a quieter market — and, for now, a slower one.
The three-week sale is behind us
I want to be careful here, because I am not against auctions. In the right market, for the right property, an auction remains an excellent method. But the idea that you list, run a campaign, and sell within three weeks almost regardless of conditions — that was a feature of a rising market, not a law of nature. We are now seeing more vendors accept a considered offer before auction day rather than gamble on a crowd that may not arrive. The method has to suit the market and the property, not the other way around. That is a matter of judgement — and judgement is precisely what a high-volume model cannot provide.
Why I now tell clients to sell first
The most important practical shift is in sequence. For years the conventional wisdom was to buy first and sell afterwards — secure the next home, then offload the old one. In a rising market that worked, because the gap usually closed in your favour.
In this market it is a trap. If you commit to a purchase before you have sold, you are negotiating your own sale from a position of weakness, against a clock, at the precise moment buyers hold the upper hand. My advice is the reverse: sell first, so that you know — not estimate, know — how much money you are actually going to have. Then buy with certainty and leverage, rather than hope.
The gap between what an agent says publicly and what they know privately is where inexperienced sellers lose money.
A word of caution from the field
This matters most when you are relying on an agent’s estimate. Too many agents in this market are still pricing in yesterday’s numbers — quoting an appraisal that would have been right twelve months ago and is simply wrong today. The vendor hears the higher figure, makes commitments around it, and only later discovers that the market never agreed.
A recent example. An agent in Double Bay had been working a property for several weeks — a knockdown site — and had a genuine offer in hand. In the meantime a second agent had been canvassing the same vendor, promising a higher price to win the listing across. The property still had not sold. And by then the vendor had already bought elsewhere, committed on the strength of a number that had been quoted to win their business rather than to reflect the market. That is how an owner ends up trapped: exposed, on a deadline, and waiting on a figure that was never real. It is not far from the line where optimism becomes misrepresentation.
And it is not a single case. I spoke with another Double Bay agent — a genuinely capable operator — about a junior in his team doing what most young agents are taught to do: canvassing vendors to win listings and, in the process, telling them the story they want to hear. I do not doubt the intent. But unfounded numbers, however well meant, do real damage. Facts are what count. An agent can only play the hand in front of him — the buyers who actually turn up, the offers that are actually real, the market as it stands on the day. Everything else is theatre.
There are no magical marketing tools
Vendors are often sold the idea that one agency has some special reach the others lack. It is not true. Almost all of it now comes back to online marketing, and the major portals are an open platform — every agent has the same access, the same audience, the same machinery. There is no exclusivity in a listing on the big portals. The photographs may differ; the audience does not.
Which leaves exactly one variable that matters: the experience of the person standing in front of the buyer, and how they actually make the deal. Every transaction is different. Sometimes it turns on extending a settlement to suit a particular buyer; sometimes, in an auction campaign, it means recognising the right offer before the hammer rather than chasing the room. These are not things a marketing budget solves — they are things judgement solves, in the moment. It is also why I believe the role of the buyer’s agent is narrowing in a market like this, and why genuine vendor advocacy — guiding an owner through method, timing and negotiation rather than simply listing and hoping — has rarely been more useful than it is now.
Where this leaves you
None of this is cause for alarm. Markets soften and recover; the Eastern Suburbs has done both more times than I can count across thirty-five years. But the rules of engagement have changed — the clearance rate, the law, and the order in which sensible people now transact. The owners who do well from here will be the ones who price to the market as it is, choose a method to suit it, and sell before they buy. The rest will learn the hard way, as some always do.
If you are weighing up a sale this year, it is worth knowing what your property is genuinely worth today — before you commit to anything.
