The first post-budget housing data is in - and it’s not pretty

Australia’s housing auction market experienced a sharp downturn in the weeks following the federal budget, with clearance rates plummeting across major capital cities. PropTrack data shows Sydney’s clearance rate fell to 39% on May 17—the first Saturday after the budget—while 285 auctions were withdrawn. Nationally, only 47% of properties sold at auction last Saturday, the weakest result since May 2020, excluding holiday periods. Brisbane’s market deteriorated rapidly, dropping from clearance rates above 60% at the start of the year to just 30% last week, the lowest since March 2025. Perth recorded a clearance rate of 33%, while Adelaide saw its rates fall from 70-80% earlier in the year to 58%, alongside a record number of withdrawn auctions. Melbourne, though comparatively stable, finished May with its weakest clearance rate of 2026 at 51%. REA Group economic analyst Luc Redman linked the decline to a mismatch between buyer and seller price expectations, suggesting downward pressure on prices. He noted that while the federal budget’s proposed changes to negative gearing and capital gains tax concessions may dampen confidence, rising interest rates remain the primary factor slowing the market. The increase in auction withdrawals signals weak buyer interest, he added. Redman emphasized that the tax reforms will likely have only a marginal impact on prices over the next 12 months due to grandfathering provisions and broad market adjustments. He stressed that supply shortages continue to drive price growth, despite the recent slowdown. The data reflects broader concerns about buyer confidence and investor sentiment in the wake of the budget and monetary policy shifts.