Sydney and Melbourne clearance rates are below 55%. Here is how buyers can use that

Auction clearance rates have softened across Sydney and Melbourne for several weeks running. The combined capital city rate sat around 52 per cent for the week ending 23 May, well below the 63.5 per cent recorded over the same week last year. Brisbane's most recent print came in at 48.8 per cent, with 40 properties passed in.

This is not a crash. It is a market where vendors are no longer setting the price.

What is actually happening

Three rate rises in 2026 have lifted the cash rate from 3.60 per cent to 4.35 per cent. The squeeze on borrowing has been quick. A single-income buyer on average wages has lost roughly $36,000 in borrowing power since January. A dual-income couple has lost about $72,000. Repayments on existing variable loans have climbed by around $360 per month over the same window.

Less buying power means less competition at auctions. When fewer buyers can stretch to the reserve, properties pass in or sell below the upper guide.

This is showing up across the eastern capitals. Sydney clearance rates have been jumping between the high-40s and high-50s. Melbourne has been holding in the high-50s. Both are well below the levels you would expect in a seller's market.

Perth and Adelaide are a different story. Adelaide has been clearing above 70 per cent. Perth runs mostly on private treaty, where supply is tight and investor demand remains strong. The 24-point spread between Perth's annual price growth and Melbourne's says it all.

What this means if you are buying in Sydney, Melbourne or Brisbane

You have more room to negotiate than buyers had six months ago. A few practical shifts to make:

Bid below the price guide on properties that have passed in. Pass-in rates are running high. Agents will often invite negotiation after the hammer falls. A well-pitched offer 3 to 5 per cent below the guide is no longer outlandish.

Look at properties that have been on the market longer than 40 days. Days on market is creeping up in Sydney and Melbourne. Vendors who listed in March or April with optimistic guides are now negotiable. Older listings are where the value sits.

Do not get drawn into pre-auction bidding wars. If a property is being heavily pre-marketed before auction day, that is the agent's strategy, not yours. Holding back until auction day often costs you nothing in a soft market.

Re-check your borrowing capacity before you make an offer. Most pre-approvals from late 2025 are now stale. Banks are reassessing on the new rate floor and your maximum has likely shrunk. Better to know now than at exchange.

What is not changing

The fundamentals still favour buyers who know what they want. Well-located properties in tightly held suburbs are still moving quickly. Adelaide has not slowed. Perth keeps grinding. The slowdown is concentrated in Sydney and Melbourne houses above the median, where the rate impact is sharpest.

If you are looking at units, townhouses, or anything in the middle ring under $1.5 million, the competition has thinned but not vanished. You still need finance ready and a clear brief.

A note on the Budget changes

The negative gearing and CGT changes announced on 12 May only kick in from 1 July 2027, and only for properties bought after Budget night. If you are an owner-occupier, nothing changes for you. If you are buying as an investor, the maths on a new build versus an established home is now meaningfully different. Talk to your accountant before settling on either.

The takeaway

Soft clearance rates are not a warning sign. They are a signal that the balance has tipped slightly toward buyers in the biggest markets. The buyers who do well over the next six months will be the ones who treat this as a window rather than a wait-and-see moment.