What the headline clearance rate isn’t telling you — and what an honest read of Saturday’s results actually shows by Alan Weiss
In sixteen weeks, Sydney’s preliminary auction clearance rate has fallen from 78 per cent to 49 per cent. The figure has been doing the rounds in industry briefings for a fortnight, usually paired with some variation of the phrase the market is adjusting. It is not adjusting. It is recalibrating — and the recalibration is sharper at the prestige end than the headline number lets on.
I want to explain why the clearance rate, as it is currently reported, materially understates what is actually happening across Sydney’s Eastern Suburbs — and what a vendor sitting on the fence in 2026 should take from the numbers underneath it.
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78 → 49 Sydney’s preliminary clearance rate, 31 Jan to 16 May 2026
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Two rate rises, one regime change
The Reserve Bank lifted the cash rate to 3.85 per cent in February, then to 4.10 per cent in March, with markets currently pricing an 86 per cent probability of a third hike in May taking the rate to 4.35. Roy Morgan estimates 1.3 million Australian mortgage holders are now at risk of mortgage stress, rising toward 1.6 million if the May increase lands.
For the Eastern Suburbs vendor, mortgage stress is not the primary issue. New South Wales has the lowest household stress reading in the country, precisely because Sydney concentrates the highest-income households in Australia. The issue is borrowing capacity at the buyer end. Each twenty-five basis point hike removes roughly eighteen to twenty-five thousand dollars from an average borrower’s assessment. Across two hikes, the typical upgrader buyer with a five-million-dollar approval in February now has somewhere closer to four-million-eight in May. That is more than enough to thin the bidder pool on a four-and-a-half-million-dollar Bondi house from five buyers to two.
Why the clearance rate is lying to you
The preliminary clearance rate, as reported by both Cotality and Domain, is a function of confirmed sales over reported scheduled auctions that produced a definitive result. Properties withdrawn before the auctioneer raises a hand are excluded from the denominator. Postponed auctions are deferred, not counted as losses. The methodology is transparent — but the consequence, in a softening market, is that the harder it gets to sell, the more flattering the headline number becomes.
Consider one Saturday. On 16 May 2026, twelve Eastern Suburbs houses were scheduled for auction. The result, drawn from the published weekly results across Domain and the industry trackers:
- Sold under the hammer: one. 61 Clyde Street, North Bondi — a five-bedroom on 787 square metres — cleared at $9,388,500.
- Cancelled and converted to private treaty: two. 45 William Street, Paddington. 153 Mount Street, Coogee.
- Withdrawn outright: two. 18 Woods Avenue, Woollahra. 172 Sutherland Street, Paddington.
- Postponed: seven. Properties in Randwick, Paddington, Coogee, Bronte, Waverley, North Bondi and Bondi Beach.
The official ledger will record that Saturday as a partial result on a small denominator. Strip the withdrawals and postponements back into the calculation, and the genuine strike rate for prestige east houses that day was approximately eight per cent. The reported clearance rate, where it appeared at all, sat at forty-nine.
That is the gap. The reported number tells you about half of properties sold. The honest number tells you about one in twelve houses at the prestige east cleared in their advertised format. Both can be correct simultaneously. Only one of them will help you plan a sale.
Three things this actually means
First, the auction system is no longer doing the job it was hired to do. Auction was always a price-discovery mechanism that worked best in a market with depth — five or six registered bidders, real competitive tension, a genuine premium for the urgency the format imposed on buyers. That market has thinned. Where five bidders once competed, agents are now negotiating in public with one. The auction is becoming theatre without an audience.
Second, a withdrawal is not a failure — it is the agent and the vendor reading the room and choosing to spare the campaign the public failure of a passed-in result. The cost of that decision is not zero. A withdrawn auction stigmatises a property in a way most vendors do not appreciate until the relisting begins. But it is a more rational response than going under the hammer with a single registered bidder and watching the property clear at reserve, with no upward pressure at all.
Third — and this is the most important point — the buyer market in the Eastern Suburbs has not disappeared. It has rearranged itself. Pre-auction offers are clearing at materially higher rates than under-hammer sales. Post-auction negotiations are running for days, not minutes. Off-market campaigns are absorbing the discreet end of the market that used to come to auction by default. The transactions are still happening. They have simply moved out of the public format that allowed agents and vendors to claim credit for them.
What the data underneath the headline confirms
- Sydney’s preliminary clearance rate has stayed below 60 per cent for six consecutive weeks. The longest sub-60 run since the 2022 correction.
- Cotality records Sydney dwelling values down 0.6 per cent in April, leaving the median 1.0 per cent below the November 2025 peak. Top-quartile properties — broadly speaking, the Eastern Suburbs — have declined for five consecutive months.
- Total Sydney advertised listings remain 22.9 per cent below the five-year average. The supply that exists is being absorbed; it is not sitting indefinitely. But it is being absorbed through negotiation, not competition.
- ANZ Research has revised its 2026 Sydney forecast to a 0.7 per cent fall, with a return to 2.6 per cent growth pencilled in for 2027.
- In the area Domain defines as Eastern Suburbs-North — Bellevue Hill, Bondi Beach, Point Piper — the gap between median listing price and median search price now sits at two million dollars. That is the widest buyer-seller expectation gap recorded anywhere in Australia.
What an Eastern Suburbs vendor should do with this
First, ignore the clearance rate as a guide to whether to sell. It is a methodologically honest number that has become, in current conditions, a misleading one. The right question is not what the clearance rate did this weekend. The right question is what the depth of qualified, finance-ready demand looks like for your specific property type, in your specific street, at this moment.
Second, choose your method of sale based on the answer to that question — not on what the agent down the road did last spring. Auction makes sense where the depth is real and the buyer profile is genuinely competitive. Private treaty, off-market and expressions of interest make sense where the buyer pool is smaller, more considered, and more sensitive to public failure.
Third, if you decide to sell, price the property to the market that exists now, not the one that existed in November 2025. The vendors who clear in 2026 will be the ones who recognise that the buyer who had a five-million-dollar approval in February has closer to four-million-eight now, and is more cautious about deploying it.
I will be blunt about one final thing. The industry is currently in a phase where a number of agents are still pitching vendors at 2025 prices to win the listing, then spending the campaign quietly walking the vendor down to a 2026 price. I have been in this business for thirty-five years and I will not run a campaign that way. It is not honest, and it is not in the vendor’s interest.
If you are weighing a sale this year, the call I would make is to come and have the conversation early. I will tell you what I think your property is worth in the market that exists today, and what method of sale will reach the buyer most likely to pay it. There is no shortage of buyers in the Eastern Suburbs. There is a shortage of accurate guidance.
