Sydney's clearance rate fell to 60.8% in late March, the lowest preliminary result since mid-December last year. The collapse is stark. In early February, when clearance rates hit a recent high of 79.6%, the market looked bulletproof. Three weeks of rate rises have changed the picture entirely.
Capital city auction clearance rates fell again following RBA interest rate increases in March as a follow-up to the February rate rise. That combination of hikes has tightened borrowing costs and exposed weaknesses in buyer capacity. The numbers that tell the story are unforgiving: Sydney hosted 1,008 auctions, a 2.4% increase from the previous week and a 24.4% increase from the same week last year. More properties going under the hammer, fewer selling.
The market is splintering by property type. The clearance rate for houses was 61.3% with units higher again at 73.9%. Apartments are holding up because they remain more accessible to first-home buyers and investors; houses are flagging because entry prices are higher and serviceability tests are tighter. Inner eastern suburbs showed the lowest clearance rate, likely due to higher price points limiting buyer depth.
Auctioneers on the ground report the shift in sentiment. Leading Sydney auctioneer Tom Panos declared that the market has changed, noting that buyer depth is diminishing and that fear is gripping the market amid rate rises and inflation. Properties in the inner west of Sydney were pulled from auction for that weekend because of lack of interest and offers prior to the auction date were very low, according to reports from local agents.
The backdrop reveals why buyers are stepping back. Sydney and Melbourne values have stalled, growing by 0.1% in Sydney over the past 28 days. Price momentum that built throughout 2025 and into early 2026 has evaporated. Buyers were still in the market but many appeared more selective, especially when it came to pricing.
What happens next depends on whether the RBA pauses. The interest rate futures market has fully priced two more 25 basis-point rate hikes by the end of the year, which would take the official cash rate to a 15-year high of 4.60%. If those forecasts prove accurate, clearance rates may fall further before stabilising.
The shift is material but not yet dire. Buyers are still active, though they are taking their time and often preferring to negotiate privately rather than jumping straight into an auction. Properties that were priced aggressively in February are finding buyers post-auction or via private treaty. The market has not broken; it has become selective.
For vendors who need to sell now, the message is simple: reset expectations. For buyers, the leverage has shifted their way for the first time in two years.