Australia’s auction market is heating up again, and recent interest rate cuts by the Reserve Bank are playing a big part. Following two consecutive 0.25% rate reductions—one in February and another in May—buyer confidence has bounced back, pushing up auction clearance rates across major cities.
In Sydney, clearance rates jumped from 61.5% in April to 65.9% in May, while Melbourne saw a rise from 63% to 67.4%. These numbers suggest that lower borrowing costs are motivating more buyers to step into the market, especially in competitive inner-city pockets.
According to market experts, the shift in buyer sentiment is clear. Auctions have become noticeably more competitive, with increased bidding activity and a greater willingness to participate early. This doesn’t mean the market is booming, but it does point to a steady recovery in confidence—particularly among first-home buyers and value-conscious investors.
“Buyers are back—but so is competition,” said one Sydney auctioneer, noting that while properties still need to be priced right, interest levels have picked up. The inner south of Sydney led the way with a clearance rate of 79.6%, while Melbourne’s inner east topped the local results at 70.8%.
Domain’s Chief of Research, Dr Nicola Powell, noted that although price growth may be limited in high-priced suburbs due to affordability constraints, the sustained rise in auction activity shows buyers are re-engaging with the market. “We’re not in a boom, but people are ready to buy,” she said.
In Melbourne, where prices have remained relatively flat, the urgency to secure a property before values begin rising again may be stronger. This is especially true for investors and those buying in the sub-$700,000 range, which remains highly competitive.
While higher-end segments above $1.5 million are still seeing more cautious behaviour, the general outlook is increasingly positive. With more rate cuts expected and improved economic sentiment, both buyers and sellers are benefiting from a more balanced, steady-paced market.
Takeaway? If you’re a buyer, now’s the time to be well-prepared. With increased competition and more confident bidding, securing your ideal home at auction might take a bit more strategy than before.
