Australias Auction Clearance Rates Remain Below 50 Percent After Labor Tax Changes

An auction is held outside of a residential property in Sydney, Australia, on May 8, 2021. Lisa Maree Williams/Getty ImagesAustralian auction clearance rates remained below 50 percent in the week ending July 5, with information services company Cotality reporting a combined capital city clearance rate of 49.8 percent, up slightly from previous weeks.Auction clearance rates measure the proportion of homes taken to auction that are sold, providing an insight into buyer demand and market sentiment.Among the capital cities, Melbourne recorded the highest auction clearance rate at 54.6 percent, followed by Sydney at 51.6 percent. Brisbane was much lower at 23.8 percent, with Perth at 33.3 percent.Canberra recorded a clearance rate of 50 percent, while Adelaide came in at 45.7 percent. No data was available for Tasmania.Cotality Research Director Tim Lawless said the combined capitals’ preliminary clearance rate had found a floor over the past three weeks, holding in the high-40 percent range.“While this week’s early result nudged higher, to 49.8 per cent (from 49.2 per cent the week prior, revising down to 45.0 percent once finalised), it was the third week in a row where the preliminary clearance rate has held below 50 percent,” he told The Epoch Times.“[Around] 1,447 capital city auctions were held this week, a 17.2 percent drop on last weeks volume and 19 percent lower than the same week last year. The number of auctions is expected to reduce further next week, with around 1,350 homes currently scheduled for auction.” The latest auction clearance rates come as the Albanese Labor government’s property tax changes appears to have an impact on housing market sentiment.Labor’s changes to negative gearing and capital gains tax passed the Senate on June 25, 2026, with the support of the Greens.Under new laws, negative gearing on residential investment properties will be limited to new builds only from July 1, 2027. Meanwhile, the 50 percent capital gains tax discount will be replaced with cost-based indexation and a 30 percent minimum tax rate on gains, prompting concern among small businesses and start-ups about higher tax burdens.Home Values Continue to DeclineCotality’s national Home Value Index fell 0.4 percent in June, the largest monthly decline since Dec. 2022.Sydney home values fell 1.2 percent, Melbourne declined 1 percent and Canberra dropped 0.6 percent. Adelaide remained unchanged, while Brisbane rose 0.3 percent and Perth increased 0.7 percent.Over the second quarter of 2026, Sydney recorded the largest decline, with values down 3.2 percent, followed by Melbourne at 2.6 percent and Canberra at 1.3 percent.Lawless said weaker conditions in the second quarter of the year were due to multiple downside factors, including the 2026-27 federal budget.“Higher cost-of-living pressures, deeply pessimistic sentiment and a further dampening of demand via property taxation changes announced in the federal budget are all contributing to weaker housing conditions,” he said.