Australian Property Market Cools: Asking Prices Fall 3.6% in Three Months

Australia’s property market is cooling faster than at any point since 2018. Buyers are paying up to 3.6% less than asking prices, auction clearance rates have dropped to 50%, and open home attendance has fallen to record lows of 2.1 people per inspection. Higher interest rates, weak consumer sentiment, and budget uncertainty are driving the shift from urgency to caution among both buyers and sellers.

Asking prices fall as buyers gain leverage

Buyers across Australia’s capital cities paid an average of 3.6% less than the original asking price for private treaty purchases in the past three months, according to Cotality data. This marks a sharp increase from 3% discounting in the March quarter. More than a quarter of all property listings tracked nationally have issued a second price guide lower than the first, with the ACT recording the highest share at 37.3%. Fewer buyers and less competition are pushing vendors to accept lower offers.

Auction clearance rates sink to nine-year lows

The national auction clearance rate fell to 50% this week, down from 54.8% the previous week and likely to be revised down to 48%. This marks nine consecutive weeks of sub-50% clearance rates not seen since the 2018 downturn caused by tighter lending restrictions. Auction volumes remain weak at 1,365 sales last week, down 12.6% from the same period last year. Sydney’s clearance rate fell sharply to 47.4%, while Canberra recorded its lowest reading since March 2019 at 27.8%.

Open home attendance hits record low

Average open home attendance fell to 2.1 people per inspection over the four weeks to 11 July, down from 3.6 a year earlier and the lowest result since tracking began in January 2024. Ray White Group chief economist Nerida Conisbee attributed the decline to borrowing costs, weak sentiment, and post-budget uncertainty for investors. Attendance had fallen from 10% above year-ago levels in January to 2.6 by early May, then eased further after the Budget on 12 May.

What this means for buyers and sellers

The shift from rapid growth to cooling marks a fundamental change in market dynamics. Buyers now have negotiating power unseen in years, while sellers face pressure to accept lower prices or withdraw from auctions. Cotality’s head of research Gerard Burg noted that cumulative effects over six months have dragged demand lower significantly. For investors, the combination of higher rates and reduced buyer urgency means holding costs are rising while sale prices fall.

Final Thoughts

Australia’s property market has shifted decisively from seller to buyer advantage. With asking prices down 3.6%, clearance rates at nine-year lows, and open home attendance at record lows, the urgency that defined the past decade has vanished. Investors should expect further price adjustments as higher rates persist.

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