The property market is serving up two headlines that seem to contradict each other. Auction clearance rates have climbed to a 19-week high, with around 60 per cent of properties finding a buyer, the best result in months. Yet at the same time, one economist is forecasting a peak-to-trough fall of up to 16 per cent for Sydney. So which is it, recovery or deeper pain? Here’s the plain-language guide to how both can be true. [PUBLISHING NOTE: auction and forecast figures move quickly; confirm the latest before publishing and update specifics.]
What the Data Shows
The improvement in auctions is real. The clearance rate reached a 19-week high with around 60 per cent of properties offered finding a buyer, a clear lift from the sub-50 per cent results that dominated winter, and Melbourne and Sydney have both shown stronger results as the spring season gets underway.
But the forecasts remain sobering. ANZ has downgraded its outlook, expecting capital city prices to fall 4.3 per cent this year and 3.4 per cent next, a peak-to-trough decline of around 10.6 per cent, while at least one economist is tipping a steeper 16 per cent slide for Sydney specifically.
How Both Can Be True
The resolution is in what a clearance rate actually measures. A clearance rate tells you the share of auctioned properties that sold, not what they sold for.
“This story is one of sellers meeting buyers with the upper hand,” analysts noted of the improved clearance figures.
That’s the key. Clearance rates can rise because vendors are lowering their price expectations to meet what buyers will pay, not because demand has surged. More properties sell, but at lower prices. So a healthier-looking clearance rate can sit perfectly comfortably alongside falling values, and that appears to be exactly what’s happening now.
It’s a pattern seen in past corrections: when sellers meet the market rather than letting auctions fail, clearance rates can mask underlying price weakness.
What’s Driving the Forecasts
The bearish forecasts rest on fundamentals rather than weekly auction noise. The cash rate sits at 4.35 per cent after three rises this year, and with the RBA still watching inflation closely, some economists think another rise is possible rather than a cut. Higher-for-longer rates keep borrowing power constrained, which caps what buyers can pay.
Add the May property tax changes weighing on investor demand, elevated listings, and national values already down around 5 per cent from their peak, and the case for further falls is straightforward, even if more homes are clearing at auction each weekend.
What It Means If You’re Buying
The combination actually favours prepared buyers. Sellers meeting the market means realistic prices and genuine negotiating room, and the forecasts suggest there may be more of that ahead. But don’t read a rising clearance rate as a signal to rush, it’s not evidence of surging demand. Price your offers to recent comparable sales, stress-test your borrowing against a possible rate rise rather than assuming cuts, and buy something you can comfortably hold. There’s no urgency in a market still expected to soften.
What It Means If You’re Selling
The message is the one the clearance rate is quietly telling you: meeting the market is what sells. Vendors adjusting their expectations are the ones transacting, while those holding out for peak-era prices are watching their listings age. With forecasters expecting further falls, waiting for a better market is a gamble, and pricing realistically now is what converts the improved auction conditions into an actual sale. This is general information, not financial advice.
The Bottom Line
A 19-week-high clearance rate and a forecast 16 per cent Sydney fall aren’t contradictory, they’re two sides of the same story: more properties are selling because sellers are meeting buyers on price, not because demand has roared back. Clearance rates measure how many sell, not for how much. For buyers, that means genuine negotiating power with no need to rush; for sellers, it means realism is what works. Read the clearance rate for what it is, and watch values and the RBA for where things are heading.
Epik Wire covers the property market in plain language for buyers, sellers and owners. Subscribe to our newsletter to stay informed.
