House-hunters face spring sale shortage in market slump

Sellers wait out the downturn

Would-be home buyers hoping to snag a bargain could face a shortage of options during the usually busy spring sales season as owners try to ride out a price slump.

Auction clearance rates have rebounded from recent multi-year lows, rising to a preliminary figure of just over 55% in the past week, according to Cotality data released on Sunday.

The share of successful sales reached an 11-week high, although it remained well below the decade average of 68%.

Low auction clearance rates generally point to falling property prices and a weak sales market.

Fewer auctions pulled from the market

Cotality research director Tim Lawless said the recent bump in clearance rates was the result of fewer auctions being withdrawn. It was a trend that peaked in June.

A high number of withdrawals could likely be attributed to low numbers of registered bidders ahead of auctions.

Home owners were worried about their ability to achieve their desired prices in a falling market.

National property prices fell 0.7% in July, the largest drop in a single month since December 2022, based on Cotality's figures.

Mr Lawless said current clearance rates pointed to continued downward pressure on home values.

“I suspect we will see a relatively subdued spring listing season as prospective vendors wait out the downturn,” he told AAP.

Sydney leads the price falls

Sales have been particularly weak in Sydney, the nation's most expensive property market. It has also experienced the largest price declines in recent months.

The drop in prices follows a series of interest rate rises and growing cost-of-living pressures on households, as well as changes to property investor tax breaks in the May budget.