Auction clearance rates across capitals fell to 47.4% last week, the lowest since April 2020.
House prices in affluent Sydney and Melbourne suburbs have declined the most, with suburbs on Sydney's northern beaches and Melbourne's east and Mornington Peninsula experiencing the fastest drops, according to Cotality data for The Australian Financial Review.
Sydney's top quartile fell 5.7% since its peak in October 2025, and Melbourne's top quartile fell 8.4% since its peak in November 2021. Analysts predict a potential price drop of up to 10%.
Sydney suburbs with largest declines
- Terrey Hills: median house price down 22.3% to $2.7 million from a peak of $3.5 million in October 2021.
- North Curl Curl: down 15.1% from the 2025 peak.
- Avalon Beach: down 13.7% from the 2022 peak.
- Kensington: down 15.1%.
- Bronte: down 13.8%.
Melbourne suburbs with largest declines
- Flinders (Mornington Peninsula): down 31% to $2.3 million from a peak of $3.2 million in November 2021.
- Caulfield North: down 19.2% from the post-pandemic peak.
- Deepdene: down 17.6%.
The federal government's overhaul of negative gearing and capital gains tax discount, along with high interest rates, have contributed to lower clearance rates.