The auction market, which heavily favoured sellers throughout much of 2025, is now showing clear signs of rebalancing. In November, the clearance rate dropped to 63% in Sydney and 63.4% in Melbourne, down significantly from September’s 71%+ figures. While still technically a seller’s market, this decline suggests momentum is shifting toward buyers.
According to Domain’s Dr Nicola Powell, a surge in listings this spring has tested buyer depth. The market hit record inventory levels in Sydney, prompting more cautious behaviour from buyers — a shift driven in part by growing uncertainty around interest rates. The RBA’s recent hold at 3.6%, combined with inflation concerns, has some buyers rethinking their budgets.
đź’¬ “Once you start to talk about a rate hike, that can generate nerves,” said Powell. “Buyers are thinking twice, second-guessing themselves.”
Auctioneer Edward Riley noted that the fear of missing out has softened, with fewer registered bidders and delayed auctions becoming more common. Vendors are also having to adjust price expectations as buyers resist overpaying.
Ray White’s Luke Banitsiotis added that the market feels balanced, not falling apart, but no longer running away either. Average active bidders per auction dropped slightly in November, reflecting the more tempered sentiment.
Meanwhile, the RBA’s battle with persistent housing inflation continues. Tight monetary policy remains in place, but ironically, it’s also slowing housing construction, exacerbating the very supply issues that keep property prices and rents high.
🏡 Affordability Crisis Deepens for First-Home Buyers New KPMG data shows only 12% of homes are affordable to households earning $180,000 — down from 30% five years ago. In NSW, it’s worse: only 5% of properties are within reach of first-home buyers. Young couples are now rethinking not just where they live, but whether they’ll have children at all, with some settling for smaller homes or delaying family plans.
🏖️ ATO Targets Holiday Homes in New Crackdown In other news, the ATO has released a draft ruling (TR 2025/D1) that tightens tax deductions on holiday homes. Unless the property is genuinely held to produce income, deductions for rates, insurance, and even maintenance may no longer apply. Casual landlords beware: the ATO is scrutinising whether listings are truly available for rent or just subsidising personal use.
Real Estate Newsletter
This article is a curated summary of various news stories from the past week, offering insights and updates on the real estate market. 12 December 2025.
Rodney McLoughlin is a trusted real estate professional with deep insights into the Australian property market. For personalised advice and market expertise, reach out to Rodney today.
