Newcastle's property market is showing signs of a downturn as auction clearance rates decline, reflecting growing buyer caution amid rising interest rates and policy uncertainty. The Reserve Bank's three consecutive rate hikes have reduced borrowing capacity by tens of thousands of dollars, denting demand.
Potential changes to negative gearing and capital gains tax, leaked ahead of the federal budget, further hit sentiment. Supply has also increased due to a boost in construction activity, adding to market pressures.
Across the combined capital cities, preliminary auction clearance rates have remained below the 60 per cent benchmark for six of the last eight weeks, according to Cotality economist Annabelle Mezieres. In Newcastle, similar trends are emerging, with fewer properties selling at auction as the bid-ask spread widens.
Nationally, Sydney's clearance rate recovered to 56.9 per cent after a low of 49.2 per cent, while Melbourne slipped to 60.2 per cent. Brisbane recorded a soft 45.7 per cent, its lowest since April 2023. Adelaide remained the strongest at 72 per cent, and Canberra held steady at 54.3 per cent.
Researchers like Louis Christopher from SQM Research note that the national housing market has turned, with the downturn broadening. The weakening vendor power is evident as auctions increasingly close without meeting seller price expectations.
