Melbourne auctions headed for worst slump since Covid

Melbourne's property market is experiencing its most significant auction downturn since the pandemic, with clearance rates falling below 50 percent for four consecutive weeks. Economists suggest that homeowners may need to adjust their price expectations downward to meet current buyer demand, potentially leading to a short-term decline in overall property values. This trend highlights a shift in market dynamics as the city enters the traditionally quieter winter period ahead of an anticipated spring rebound.

Melbourne has recorded its fourth straight week of auction clearance rates between 46 and 47 percent, marking the worst performance for the city since a six-week slump during the 2021 Covid lockdowns. According to PropTrack economist Luc Redman, these diminished rates are expected to persist throughout the winter season. For the current week, approximately 561 residences are scheduled for auction, representing a 4 percent decrease compared to the same period last year, while regional Victoria has only 17 properties slated for sale.

The cooling market has already impacted property values, with Melbourne’s median house price dropping to $984,000 in June, a figure lower than the median recorded at the same time in 2025. Redman noted that if low clearance rates continue, sellers will likely be forced to reprice their expectations to align with what buyers are willing to pay. While a preliminary clearance rate of 52.6 percent was initially reported for the previous week, it was later revised downward to 47 percent, underscoring the current volatility in the auction environment.

Despite the current slump, industry experts point to a potential recovery as the market moves toward the spring season. Redman observed that many buyers are currently being selective, waiting for specific properties rather than rushing into the market, which provides an opportunity for those looking to secure a home before prices and listing volumes rise. Although a short-term downturn is anticipated, the persistent shortfall in housing supply is expected to drive long-term price growth once the market moves past the seasonal winter lull.