It’s almost a national pastime. Every weekend on streets and in cul-de-sacs, there’s an agent enacting a familiar ritual.
“I have $900,000, can I get $910,000? Nine ten, now twenty. Twenty, can I say thirty? Give me thirty, thirty …” the (mostly) men in blue suits cry, traditionally amid a throng of people about to make one of the most important decisions in their lives.
Experts have long warned that Australia’s penchant for auctions - we are among the few countries that regularly use them – has helped push prices up.
But now the agents’ imploring cries are getting shorter, and the gathered crowds are shrinking.
Recent falls in auction clearance rates are resulting in dramatic headlines featuring words like “horror”, “failure” and “wipe out”.
Sign up for the Breaking News Australia emailThis week, data from SQM research showed a sharp rise in property listings around Australia – up 22.8% over the last 12 months. Yet fewer are being listed for auction.
“The rise in total listings should also be contrasted against the fall in auction listings, which is actually down by about 20% compared with the same period last year,” Louis Christopher, the managing director at SQM, says.
“Vendors in this market are increasingly preferring to sell via private treaty.”
So what’s going on with Australia’s love affair with auctions – and how healthy is it?
Declining popularity
When property is sold, “in a lot of countries it’s a straightforward private sale,” says Michael Fotheringham, an independent housing expert. “You put a property up for sale, you agree to terms, and that’s probably the most common sale method internationally.”
In the US, auctions are seen as a last resort: a distressed seller with no other options; a mortgage foreclosure, with the lender seeking to recoup the money loaned. There’s slightly more interest in the UK, where auctions usually make up about 3% of all property sales. In 2025, 28,975 dwellings were sold by auction, a record high.
“Auctions really are mostly used for scarce commodities,” says Fotheringham, the former head of the Australian Housing and Urban Research Institute.
“You think about the other spaces where auctions are used; it’s high-end art, antiquities, things that are scarce, where you’ve got a much bigger interested audience than there is a supply of them.
“And sadly, that is how we see housing in this country since property speculation has been so rampant over the last few decades.”
Data from Cotality shows that in the four weeks ending 28 June, 6,895 properties – accounting for 30.3% of home sales – across Australian capital cities were sold via auction.
But auctions have been becoming less popular this year, with Cotality’s head of research, Gerard Burg, suggesting it’s a clear indicator of the “weakening in market conditions across the country”.
“We have moved from clearance rates around 70% in September last year to below 50% in June and July,” he said. “This points to the decline in property demand, resulting in the cumulative affects of affordability pressures, interest rate rises, hits to household incomes and confidence related to the Iran conflict and policy changes in the federal budget, and a slower adjustment in vendor expectations to reflect these market conditions.”
Fotheringham also points to the government’s changes to capital gains tax concessions and negative gearing – which he says had favoured speculative purchasing by investors that has turbo-charged prices.
“By giving deductions on costs and generous discounts on taxation of capital gains the relationship between purchase price and rental yield was uncoupled,” he says.
“[This was] encouraging investors to purchase at prices not justified by expected rental income, and in doing so outbid first home buyers.”
Do auctions push up prices?
Some say a fall in auctions is good news. In Victoria, the Greens party has announced a policy to ban street auctions altogether.
The party claims the current property auction system is “designed to push up house prices by pressuring buyers into paying more”.
Gabrielle de Vietri, the Victorian Greens housing spokesperson, says “the goal isn’t to move auctions from the footpath to the internet.
“The goal is to start moving away from an auction culture altogether towards a more transparent, fair system that works for people looking for a place to live. The Greens’ proposed changes would together disincentivise auctions as the preferred means of sale.”
But just how much auctions affect house prices is hard to track.
Using data from more than 480,000 residential property transactions in New South Wales and Victoria between January 2007 and December 2019, researchers at UNSW and the University of Sydney found there was a premium – but only about 0.7% compared with private treaty sales.
“It’s probably less than what people think,” says associate Prof Kristle Cortés of UNSW. “And if you consider that there’s an additional cost to auctions between hiring the auctioneer and the staging process, it’s actually quite expensive.”
They also found that about one in five auctions in Australia end without a sale – and homes that failed to sell at auction subsequently sold for about 1.3% less than comparable properties sold by private treaty. That translates to a loss of roughly $9,000 to $10,000, based on average home prices.
What can drive unsuccessful auctions was clear: rainy days had more failed auctions, as did less experienced agents. If there had been one successful auction in an area, more would shortly follow.
Bianca Dacic, a Victorian mortgage broker, said some agencies gear their brands towards auctions because it was “a done deal”.
“Most of the time, unless it gets handed in, but they still have the opportunity to negotiate after that. You’ve got a due date that it needs to happen by and they work towards qualifying all the buyers and creating more competition,” she said.
Fotheringham said overall auctions “do push the prices upward”, often pushing final prices higher through competitive bidding, which means agents will take home a higher amount.
The underlying issue is with price speculation, not the way it was being sold, “and the treatment of real estate as a financial investment rather than a social need,” Fotheringham said.
“It is investors buying to make rapid profit on capital growth.”
Fotheringham cautioned against a ban on auctions, as they can be a more transparent sales method, but called for tighter regulations.
“The use of dummy bids and vendor bids, the use of the relationship between a reserve and when it’s actually for sale and an advertised price range,” he said. “I think we can continue to improve how real estate auctions are regulated.”
