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Australia housing market slows as interest rate hikes impact auction clearances
Australia’s housing market is experiencing a downturn as rising interest rates and high living costs weigh on buyer demand. The national preliminary auction clearance rate fell to 48.2 percent, the second-lowest of 2026, following the Reserve Bank of Australia’s decision to raise the cash rate to a 15-year high of 4.6 percent.
Data from Cotality indicates that spring auction volumes are down 31 percent compared to 2025. While Melbourne and Sydney maintained clearance rates above 50 percent, other regions saw significant weakness, such as Brisbane, where only 25.6 percent of auctions resulted in a sale. The number of homes available for sale nationally has risen to approximately 276,000, a 21.6 percent increase year-on-year, driven largely by properties remaining on the market longer.
Economists and banking executives note a growing hesitancy among buyers. Steve Laidlaw, CEO of People First Bank, observed that prospective purchasers are waiting to see where market valuations land, with some predicting price reductions of 10 to 15 percent. Additionally, distressed sales have increased by approximately 29 percent year-on-year, reflecting the broader impact of reduced borrowing capacity and shifting housing policies.
Entities
Australia · Chris Minns · Cotality · Domain · Elizabeth Bay · Melbourne · New South Wales Government · People First Bank · Peter Maher · Ray White · Reserve Bank of Australia · Sydney
Claims
What the coverage asserts, and how many sources carry each claim.
- [○ 1 SOURCE] The official cash rate was increased to 4.6 per cent. www.perthnow.com.au
- [○ 1 SOURCE] Home buyers are waiting to see where the market lands due to high interest rates and living costs. www.perthnow.com.au
- [○ 1 SOURCE] House prices fell 6.4 per cent in 2026. www.perthnow.com.au
- [○ 1 SOURCE] The number of homes available for sale nationally rose to approximately 276,000. www.proactiveinvestors.com.au
- [○ 1 SOURCE] Distressed sales increased by approximately 29% year-on-year in September. www.proactiveinvestors.com.au
- [○ 1 SOURCE] The preliminary capital-city auction clearance rate fell to 48.2%. www.proactiveinvestors.com.au