Momentum in Australia’s housing market has waned following the Reserve Bank of Australia’s (RBA) 0.25% interest rate cut in February.
Last weekend’s combined capital city final auction clearance declined to 59.4%, down from 63.2% the prior week and 64.8% over the same week the previous year.
The result was also the first time the final clearance rate had fallen below 60% since the week ending 2 February 2025, prior to the 0.25% rate cut.
Source: CoreLogic
Sydney’s final clearance rate fell to 59.2%, marking the worst result since the week ending February 2. The result was significantly lower than the prior week’s clearance rate of 64.1% and the 68.8% reported in the same week last year.
Melbourne’s final clearance rate was 60.5% last week, compared to 64.5% the previous week and 60.3% at the same time last year.
The following chart, which plots the monthly average auction clearance rates across Sydney, Melbourne, and the combined capital cities, shows that clearance rates retraced in March following the strong bounce in February.
CoreLogic’s daily dwelling values index also shows that price momentum has stalled across the major markets, led by Sydney.
Most economists expect the RBA to cut the cash rate by 0.25% at its next meeting in mid-March, followed by two more cuts this calendar year.
Lower interest rates, combined with stimulatory housing policies regardless of who wins the upcoming federal election, are likely to usher in another housing upswing.
