Confidence of buyers and sellers rattled as clearance rates slump

Interest rate rises, ongoing geopolitical pressures and the Albanese Budget has had an impact upon our property market.

Clearance, rates for auctions have now sharply dropped to the lowest levels in 6 years, as buyer and seller confidence teeters. Rising interest rates are affecting household budgets, driven by inflationary pressures and a gloomy geopolitical environment exacerbated by the Trump/Iran war promising lasting ramifications for the cost of living.

It is a blow to confidence on all sides as fewer sellers are putting their homes up to auction in an increasingly weak market and unease spreads through buyers confronted by rising costs.

Clearance rates usually hover around mid 60% on average in the Melbourne market. Currently, this has sharply fallen to only 47%.

While some of this slowdown is seasonal as winter months support a slowdown in buyer and seller activity, the current market jitters are feeding into both buyers and sellers sitting on their hands.

Until we see an improvement in any of the forces impacting sentiment, it is likely that buyer and seller confidence will continue to suffer.