What is the auction market outlook for 2025? The latest predictions

The Sydney and Melbourne property markets are set for a short-lived bounce-back when the 2025 auction season kicks off this weekend but are expected to dip again soon after.

Domain chief of research and economics Dr Nicola Powell forecasts a bump in the auction market and its clearance rate.

“I’m expecting to see an elevation of clearance rates over the early parts of the selling season … and then we will see it start to fall and probably go back in line with what we were seeing at the latter part of 2024,” she says.

After catching its breath over the new year, the property market is tipped to gain momentum this Saturday with 950 auctions scheduled nationally, more than quadruple last weekend’s number of 247, according to Domain data.

Contact Agent

20 Kingsburgh Parkway (gables), Box Hill NSW 2765

5

4

2

View property

Ahead of McGrath’s February 1 Super Saturday – Australia’s biggest onsite auction event, where over 130 properties will go under the hammer across Sydney – agent Corie Sciberras of McGrath Northwest has noticed an energy shift when comparing the city’s auction market between December 2024 and now.

“The back end of last year – the last quarter in particular – was very much a buyer’s market,” he says. “There was little to no energy at auctions and lots of one-bidder auctions.

Contact Agent

40 Braddon Street, Blacktown NSW 2148

2

1

1

View property

Auction Guide $1,100,000

172 Frederick Street, Lalor Park NSW 2147

4

2

2

View property

“We have seen a flip side of that at the moment, coming back into the new year, and what I’m expecting for Super Saturday is a lot more energy … with quite a big shift in buyer’s mentality on actually closing deals and competing again.”

The numbers also stack up. In the first weekend of open homes this year, on January 11, “we met more people in one day than we did over the course of all of December and half of November”, Sciberras says.

Auction

45 Jupiter Road, Kellyville NSW 2155

6

2

2

View property

The Melbourne property market, particularly the number of properties going under the hammer, is also feeling energised.

Alice Rossi of Ray White Bundoora and her colleagues galvanised the auction market in Bundoora and its surrounding suburbs into full acceleration mode at the end of last year.

Launching marketing campaigns from Boxing Day and hosting open homes in what is traditionally an off-peak season in real estate, the team was able to get ahead of the surge of listings that appear in mid-January and are scheduled for auction in February.

“We always found this period to be extremely beneficial for all the people involved, from sellers to purchaser to agent,” she says.

“We’ve had extremely good numbers; we had a campaign with 120 people who came through.”

$900,000 - $990,000

76 Edmund Rice Parade, Watsonia North VIC 3087

3

2

2

View property

Rossi says she did notice the auction clearance rate drop at the end of the year, but is optimistic it will now rise again with renewed interest from both buyers who missed out on securing a home or were waiting for interest-rate cuts.

Rossi and the Ray White Bundoora office hosted a super auction event last Thursday, with 20 auctions scheduled to go under the hammer back to back.

Four properties were sold prior to the event, 11 sold on the night, and one afterwards – an impressive 16 out of 20 properties sold.

$750,000 - $790,000

134 McLeans Road, Bundoora VIC 3083

3

1

2

View property

Regarding this year’s early bounce-back, Powell says, “Auction volumes tend to be slightly lower, but also you get this overhang of buyers who missed out in the latter part of the previous calendar year, and they come to market determined to make their purchase”.

This momentum will result in a spike in auction clearance rates, but Powell predicts this will be relatively short-lived, with the rate aligning with that of late last year.

“The year tends to begin with a slightly higher clearance rate than how the previous year ended,” says Powell, who forecasts clearance rates to hover at slightly over 60 per cent.

Auction $950,000 - $1,020,000

54 Hardiman Street, Kensington VIC 3031

2

1

2

View property

Auction

27 Dunmore Street North, Bexley NSW 2207

4

1

2

View property

As of November 2024, the combined capital city auction clearance rate sat at 57.2 per cent, on Domain data.

“Sixty per cent is what we call the benchmark for house price inflation, and you tend to find when clearance rates are above 60 per cent, particularly when they’re getting to 70 per cent and 80 per cent, you know that’s a roaring market and indicates the price is going to rise,” Powell says.

With 60 per cent seen as the great neutraliser, what does it mean when the auction clearance rate falls?

“When you start to get clearance rates sitting around that 60 per cent and slightly lower, it does show more stagnant conditions that are swaying towards the buyer,” Powell says.

She also predicts we could see a “year of two halves” for the auction market and for prices.

Auction Saturday 22 February at 12pm

30 Alice Street, Malvern VIC 3144

4

4

2

View property

$900,000 - $990,000

76 Edmund Rice Parade, Watsonia North VIC 3087

3

2

2

View property

With rate cuts anticipated in February and a federal election on the horizon, there’s a lot happening in the first half of 2025 that could also affect the auction market and clearance rates.

“What we could see is more momentum being pushed back into the auction market if we see a few rate cuts occur, which might set foundations for a good selling season in spring,” Powell says.

This would also improve borrowing capacities, which she notes “could have a positive influence on clearance rates and a better outcome for sellers later on in 2025”.