Why local property markets can tell a different story to national auction trends

Key takeaways:

• National trends don't tell the whole story. Auction conditions can vary significantly between suburbs, even within the same city.

• Local competition still exists. Some suburbs continue to attract strong buyer demand despite the broader market slowdown.

• Clearance rates are only one indicator. Auction results can be influenced by auction volumes, property types and reporting rates, so they should be viewed alongside other market signals.

• Flexibility may create opportunities. Expanding your search to nearby suburbs or different property types may improve affordability without compromising your priorities.

• Understanding your borrowing power matters. Knowing your budget can help you make more informed decisions, regardless of broader market conditions.

Australian buyers may have more choice as the housing market cools, but that doesn't necessarily reflect the conditions in the suburb where they're hoping to buy.

The broader auction slowdown is clear. Cotality’s July Monthly Housing Chart Pack showed the combined capital city clearance rate falling from about 66% in early February to the low-40% range by June as demand eased and advertised supply increased.

Yet national trends do not always describe what is happening in individual suburbs. While auction conditions have softened broadly, a small number of locations are continuing to record relatively strong results.

Aussie's analysis of HTAG auction data identified several suburbs that recorded relatively strong clearance rates in June, although results varied considerably depending on auction volumes.

Paralowie in South Australia recorded a clearance rate of 91.7% from 18 reported sales, while Kambah in the ACT recorded 69.4% from 22 sales. Curtin recorded 75%, although this was based on a much smaller sample of five reported sales.

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The auction slowdown is real, but it is not evenly spread

Higher borrowing costs, weaker confidence and tighter household budgets have reduced the depth of buyer competition across much of the market.

Independent property economist Cameron Kusher said the two largest auction markets, Sydney and Melbourne, had already experienced softer prices and fewer active buyers.

“For an auction to be really successful, you want a lot of competition for the property, and you want that competition to bid the price higher,” he said.

“Buyer numbers have certainly thinned out.”

Kusher said clearance rates remained useful because they provided one of the timeliest measures of housing sentiment, but buyers should be careful about treating them as a complete picture of the market.

“It’s a good indicator of sentiment, but you also need to remember that it’s probably more reflective of the higher-quality properties,” he said.

He said auction results were most relevant in Sydney and Melbourne and represented only part of the broader sales market. That means weaker headline figures may not describe the competition attached to a particular suburb, price bracket or property.

That doesn't mean buyers should expect the same conditions everywhere.

Patrick Boyce, an Aussie Buyer’s Agent, said some suburbs were continuing to attract strong owner-occupier demand because of their schools, transport links, lifestyle appeal and limited housing supply.

“While the broader market has cooled in selected areas, buyers are still prepared to compete aggressively for the right properties,” he said.

“Much of the demand is coming from owner-occupiers who have been waiting for the right property and are willing to pay a premium when it becomes available.”

For buyers, a lower national clearance rate doesn't necessarily mean every seller will accept a lower offer. In suburbs where demand remains strong, competition can still limit buyers' negotiating power.

Where buyer competition is holding up

The limited number of stronger suburb results suggests competition has not disappeared altogether, particularly in locations offering relative affordability, lifestyle appeal or constrained supply.

Jacob Stanton, a real estate agent at The Property Collective in Canberra, said Kambah continued to attract buyers wanting to live close to the Woden Valley region without paying Woden prices.

“You get a lot of people buying into Kambah who can't afford Woden but want to get as close to it as possible,” he said.

He said Kambah appealed to buyers looking to maximise what they could purchase within their budget.

Broader lending data also shows first-home buyers accounted for 37% of owner-occupier lending in the ACT, the highest share of any state or territory. While this does not explain the suburb result on its own, it points to a relatively active first-home buyer segment across the territory.

For buyers, it highlights that relative affordability can continue to support buyer demand, even when broader market conditions soften.

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A softer market does not make every home negotiable

One of the clearest messages from buyers' agents is that national market conditions should not dictate how buyers approach every property.

Boyce said some buyers were assuming they would have greater scope to negotiate.

“One of the biggest mistakes is assuming every property will be negotiable simply because they've heard the market has slowed,” he said.

“Property markets are highly localised. Buyers who make low offers on quality homes in tightly held suburbs often miss out altogether.”

Rather than relying on national headlines, buyers may benefit from understanding conditions in the specific suburb they're targeting. If supply remains limited and owner-occupier demand is strong, sellers may have less incentive to negotiate.

Mike Lao, a real estate agent at Edge Realty in South Australia, said that was reflected in Paralowie, where the market had become more balanced without losing buyer interest altogether.

“It is becoming more balanced, so the buyers are getting a little bit more selective,” he said.

“We are getting a few fewer people attending, a few fewer people bidding, but anything that's priced right generally does sell.”

Lao said first-home buyers remained the dominant buyer group in the suburb, suggesting affordability continues to underpin demand even as overall market conditions soften.

What local competition may mean for your property search

Even where buyer competition remains relatively strong, that doesn't necessarily mean buyers need to increase their budget. It may simply mean being more flexible about where they buy or the type of property they consider.

Boyce said buyers who repeatedly missed out in tightly held suburbs should think about what they valued most about the location rather than focusing solely on the suburb name.

“Nearby suburbs with similar transport links, school catchments, lifestyle amenities and future infrastructure investment can often represent better value,” he said.

“Sometimes moving just one or two suburbs away can significantly improve affordability without sacrificing lifestyle.”

For buyers whose borrowing capacity may have changed, broadening the search to nearby suburbs or considering a different property type may improve affordability without necessarily compromising lifestyle.

An Aussie Broker can help buyers understand how different purchase prices, suburbs and loan scenarios could affect their borrowing capacity and ongoing repayments, making it easier to compare different pathways into the market.

Clearance rates are only one piece of the puzzle

Auction clearance rates provide a useful snapshot of buyer and seller sentiment, but they are only one measure of market conditions.

Clearance rates can also be influenced by the number of auctions held, the types of homes being sold and how many results are reported. A suburb with only a handful of auctions may not accurately reflect broader market conditions.

Kusher also noted that auction data tends to reflect higher-quality properties and is most relevant in Sydney and Melbourne, where auctions form a larger share of sales.

For buyers, clearance rates may be most useful when viewed alongside other factors such as available stock, comparable sales, borrowing capacity and whether the property suits their long-term needs.

What buyers can take away

National property trends can provide useful context, but every buyer ultimately purchases in a local market. Understanding how conditions differ between suburbs, and how those conditions align with your borrowing capacity and budget, may help you make more informed property decisions.

An Aussie Broker can help you understand your borrowing power, compare loan options and explore different suburb and property scenarios to determine what may be achievable based on your circumstances.