Home sellers shy away from auctions as demand dips

Low auction approval rates are just part of the home sales downturn story; because more and more sellers are giving up on auctions altogether in favor of private sales.

The share of homes listed via auction fell to just over 30 percent in June from a peak of 45 percent in November 2025, according to data from real estate analytics firm Cotality.

Gerard Burg, head of research at Cotality, said reduced buyer demand was reshaping the market, driving more sellers to list their homes by private treaty.

“In times of strong demand, sellers clearly prefer auctions as competition between multiple bidders can lead to higher prices,” Mr. Burg said.

“However, lately they have become more wary of this weak demand environment.

“This has been seen in the increasing tendency to sell before the auction date and the increase in withdrawals, indicating that sellers are increasingly reluctant to test the market at auction and have their properties fail to sell.”

Like auction approval rates, home prices have been falling for months as the Federal Reserve’s interest rate hikes, rising inflation and global economic uncertainty impact buyer confidence.

Changes to negative gearing and capital gains tax concessions in the May budget have further reduced demand from property investors.

Sydney house prices fell 1.2 per cent in June and are now 3.7 per cent below their January peak; Melbourne values ​​are four percent below the highest level in March 2022.

But Ray White chairman of auctions in NSW, David McMahon, said calling it a buyer’s market was an exaggeration.

“I think it’s a pretty fair market,” he told AAP.

Mr McMahon said sellers tend to move away from auctions when the market is weak, but there is still value in going through the auction process.

When comparing an auction campaign that includes two weeks following auction day to a private deal process over the same period, auctions still offer a higher clearance rate, he said.

But Mr. McMahon said many agents discouraged sellers from going to auction.

“Nobody likes standing around on auction day without bidders and not making a sale.”

While the auction market tends to slow down during the winter months, the current downturn goes beyond normal seasonal factors, Mr. Burg said.

“What we have observed over the last few months has been a steady decline in sales volumes as demand-side pressures have increased, meaning there are fewer buyers in the market,” he said.

Despite the decline in listings, auction share is still above the long-term average of around 28 percent, indicating that private sales will continue to capture a larger share of the market.