Less than half of all properties taken to auction across Australia were sold last week, with new data showing the national preliminary clearance rate edging up only marginally to 49.8 per cent — a figure experts say offers little comfort as the broader housing market continues to soften.

The slight improvement from the previous week's 49.2 per cent has been described by industry analysts as insignificant, with that prior result already representing the lowest clearance rate recorded since the COVID-19-driven market slowdown in 2020. Notably, three consecutive weeks have now closed below the 50 per cent mark — a streak that is raising concerns about the depth and duration of the current downturn.

City-by-City Breakdown: Brisbane Records a Dramatic Fall

Among the capital cities, Melbourne led the nation with a clearance rate of 54.5 per cent, followed by Sydney at 51.6 per cent, Canberra at 50 per cent, and Adelaide at 45.7 per cent.

The standout story, however, was Brisbane, which posted a clearance rate of just 23.8 per cent — a sharp drop from 39.3 per cent the week before and a stark contrast to the same period last year, when the Queensland capital led the national market with a 69.6 per cent rate. At that time, most Australian capital cities were tracking between 63 and 70 per cent, painting a picture of a far more buoyant market than exists today.

Multiple Pressures Driving the Property Market Slump

Cotality Asia-Pacific executive research director Tim Lawless said the persistently low clearance rates pointed to a clear disconnect between what sellers expect to receive and what buyers are prepared to pay.

"Clearance rates persistently holding this low shows a mismatch between buyer and seller expectations," Mr Lawless said. "It's probably another indicator of the market going through a phase of negative movements."

Mr Lawless identified a range of compounding factors weighing on the market, including ongoing affordability and serviceability challenges, interest rate pressures, and a pullback from investors following federal budget changes that restrict negative gearing to new builds. June recorded the biggest monthly fall in national housing values since 2022 in the wake of that announcement, according to Cotality data.

A rise in the number of properties listed for sale has also contributed to the market's sluggishness. "We're seeing advertised listing numbers rising which means there's more supply in the marketplace and of course that means buyers have more choice," Mr Lawless said. "This takes urgency out of the market and gives them more ability to negotiate."

His outlook for the months ahead was blunt: "We're in a housing market downturn and I don't see any factors moving the market around."

Investor Sentiment at a Low, But Activity Persists in Some Segments

Property Buyers director Munro Donen pointed specifically to the exit of investors as a key driver of the slowdown, saying changes to both negative gearing and capital gains tax arrangements had effectively pushed that cohort out of the market.

"With changes to negative gearing and the capital gains tax, investors have evaporated from the market," Mr Donen said. "What I believe is that sentiment needs to change and the current sentiment is very, very low."

Despite the gloomy headline numbers, Mr Donen noted that demand had not completely dried up across the board. Well-presented properties in desirable locations were still attracting buyers, and the $1 million to $2 million price bracket in particular was continuing to see competitive interest.

"Good quality properties, well renovated in good locations are still attracting demand, but prices have definitely adjusted," he said. "The numbers might be low on the auctions, but there are still sales happening."

With clearance rates sitting at levels described by analysts as "pretty rare," and no clear catalysts on the horizon to reverse the trend, the Australian property market appears set for a prolonged period of subdued conditions heading into the second half of the year.