Auction Clearance Rates at 52%: May 2026

The national auction clearance rate fell to 52.2 per cent in the week to May 23, 2026 - well below the 63.5 per cent recorded over the same period last year. In Sydney, the clearance rate came in at 64.2 per cent, up slightly from the previous week but still almost 11 percentage points below where it was in May 2025. Brisbane weighed heavily on the national result, with conditions softening more quickly than the other capital cities. For first home buyers who have spent the past two years watching properties sell tens of thousands above reserve, this represents a meaningful shift in market dynamics.

What clearance rate data actually tells buyers

A clearance rate below 60 per cent nationally indicates that a growing share of properties are either passing in at auction or being withdrawn before the event. When a property passes in, the highest bidder has the right to negotiate with the vendor privately - often at a price well below what might have been achieved under more competitive bidding conditions.

Vendor discounting has also risen to 3.1 per cent nationally according to Cotality data, meaning vendors are accepting prices meaningfully below their initial asking price to secure sales. A year ago, a typical auction in the combined capital cities would see strong competition push prices above reserve. Today, in many suburbs outside Sydney's inner ring, the competition has thinned noticeably and buyers who arrive prepared can negotiate from a position of strength.

Why the market is shifting right now

Three factors are reshaping the auction landscape for first home buyers:

• Borrowing capacity has fallen. Three rate hikes since February 2026 have added approximately $272 per month to a $600,000 mortgage and reduced the amount most buyers can borrow at the current 4.35 per cent cash rate. Fewer buyers qualify for the higher price brackets, which reduces competition at auctions in the mid-range.
• Listings are rising. New properties listed for sale over the four weeks to early May were 4.7 per cent above the five-year average, giving buyers more options and reducing the urgency to compete aggressively at any single auction.
• Consumer confidence is subdued. Persistently high living costs and uncertainty about the June 16 RBA decision are keeping some would-be buyers on the sidelines, thinning the pool of active bidders at auctions across the mid-price range where first home buyers typically compete.

Not all markets are softening at the same pace

The shift is not uniform across Australia. Sydney's 64.2 per cent clearance rate, while below last year's figures, still reflects a relatively active auction market, particularly in the inner suburbs. Perth continues to outperform the national average significantly, driven by a chronic undersupply of housing relative to population growth. Brisbane's market has softened more sharply, contributing significantly to the lower national figure.

For first home buyers, this means the negotiating advantage varies considerably by location. A buyer targeting established houses in Brisbane's outer suburbs or Melbourne's middle ring currently has more leverage than someone targeting inner-city Sydney property. Understanding the specific conditions in your target suburb - rather than relying on national averages - is more useful when deciding how aggressively to bid or when to negotiate after a pass-in.

What first home buyers should do in this market

A market where clearance rates are softening offers specific practical opportunities. Here is how to position yourself to take advantage:

• Attend auctions in your target suburbs and observe how many registered bidders participate. If a property passes in with only one or two bidders, the vendor's negotiating position is weaker than the guide price might suggest.
• Get formal pre-approval before attending any auction, so you can move quickly if a passed-in property presents a genuine opportunity. A mortgage broker can help you confirm your borrowing capacity under the current rate environment.
• Review your deposit structure and scheme eligibility before the June 16 RBA decision. If the RBA pauses rate rises - as money markets currently expect following the softer April jobs data - buyer confidence may return more quickly than anticipated and competition could increase again in the second half of 2026.
• Check your eligibility for the Australian Government 5% Deposit Scheme (formerly the First Home Guarantee), which now offers unlimited places with no income caps and allows eligible first home buyers to purchase with just a 5 per cent deposit and no lenders mortgage insurance.
• If you are eligible for state grants or concessions, confirm those figures before finalising your budget. The gap between what you thought you needed and what you actually need is often larger than expected once grants and stamp duty concessions are factored in.

Run the numbers

Use these tools to understand how the current auction market conditions affect your buying position:

• Borrowing Power Calculator - see how much you can borrow at the current 4.35 per cent cash rate, and model how a June pause or further hike would change your capacity before you commit to a price at auction
• Interest Rate Shock Tester - stress-test your repayments across different rate scenarios so you know your ceiling before bidding, and avoid overcommitting if rates continue higher
• Grant Stacker - check the grants, stamp duty concessions, and federal schemes you may be eligible for in your state before setting your auction budget, since these can meaningfully reduce your upfront costs