Brisbane runs out of steam amid lowest early auction clearance result in 6 years

Cotality’s Market Indicator Summary showed that Brisbane’s preliminary clearance rate was 23.8 per cent, the lowest result since early May 2020, marking the fourth time in five weeks it had remained below the 40 per cent threshold.

Across the combined capitals, the preliminary clearance rate increased slightly to 49.8 per cent, up from 49.2 per cent the previous week, but remained below 50 per cent for the third week in a row.

Apollo Auctions auctioneer, Michael Rebetzke, said Brisbane’s early clearance result was a reflection of numerous vendors not meeting the market that week, rather than total property sales.

“A lot of the time at the moment we’re seeing that vendors are needing to see what happens on auction day, get that feedback and then price the property accordingly,” he told REB.

“And then most of the time we’re seeing a transaction shortly following the auction afterwards.”

He said the Brisbane market seemed to be taking a slight pause after years of strong growth since 2020, but high migration will continue to drive strong demand.

“If you look at that in a cycle, it can’t continue to grow at 20 per cent per annum, that’s just unsustainable,” he said.

“It will recalibrate – a large amount of internal migration in Australia comes to South-East Queensland, so the fundamentals are still incredibly strong for price growth.”

Cotality’s head of research, Gerard Burg, said auctions were less common in Brisbane than in the larger capitals, and were often focused on the higher end of the market, rather than being representative of the market as a whole.

“The weaker conditions that we’ve seen in Brisbane auctions in recent weeks speak to the deterioration that we’ve seen in the upper end of the city’s market over this time,” he told REB.

Burg said the higher-value segments of the market naturally had fewer potential buyers, but demand had been particularly affected by higher interest rates, cost-of-living pressures, the conflict in the Middle East, and federal budget changes.

“A key watch going forward will be if fewer homes are listed for auction in the coming months in response.”

Despite hanging below 50 per cent for two consecutive weeks, Sydney’s preliminary clearance rate increased to 51.6 per cent, up from 47.3 per cent the previous week.

Melbourne’s early clearance result also rose slightly by 4.3 percentage points, to 54.5 per cent, the highest in three weeks, but still remained below 60 per cent for the sixth consecutive week.

Meanwhile, Adelaide saw a preliminary clearance rate of 45.7 per cent, a 23.0 percentage point fall from the previous result of 68.7 per cent.

It marked the city’s second-lowest clearance rate so far this year, after the week ending 21

June, when the clearance rate was 40 per cent.

In Perth, just nine auctions were held, returning an early success rate of 33.3 per cent.

Meanwhile, there were no auctions in Tasmania for the third week in a row.

Cotality has forecast auction activity to soften further this week, with around 1,300 homes currently scheduled to go under the hammer.

Rebetzke said affordability pressures were continuing to squeeze buyers, particularly in the lower and middle segments of the market.

“There’s not much money left over by the time you pay the childcare costs, your food and your living expenses. So people are, they’re really, really feeling it,” he said.

He also said, despite sellers dropping their pricing by as much as 5 per cent, buyer and vendor pricing expectations continued to be misaligned.

“Buyers are trying to get about 20 per cent off, there’s a gap there of about 15 per cent,” Rebetzke said.

“Because there’s such a high owner-occupier percentage in Australia, there is not going to be a property crash. So I think buyers need to get a little bit more realistic that they can buy something at a fair price.”