Why auctions went quiet the weekend before the Reserve Bank's rate call

If you were house hunting in Melbourne or Sydney last weekend, you may have noticed something different at the auctions you went to. Fewer hands went up. More properties passed in without a sale. The energy that usually pushes a Saturday auction past its reserve simply was not there.

What the numbers showed

The numbers back up what buyers were sensing on the ground. Across Melbourne, only 52 per cent of reported auctions sold under the hammer for the week of 20 to 26 September, down from 71 per cent over the same week last year. Sydney told a similar story, with 51 per cent selling compared to 70 per cent a year earlier. That figure, known as the clearance rate, is simply the share of auctions that end in a sale on the day rather than being passed in or withdrawn. A lower clearance rate generally means less competition between buyers, and it is one of the clearer real time signals of how confident the market is feeling at any given moment.

Why the timing matters

The timing is not a coincidence. The Reserve Bank's next interest rate meeting falls this Tuesday, and most economists expect it to lift the official cash rate by a quarter of a percentage point, from 4.35 per cent to 4.60 per cent. The cash rate is the rate the Reserve Bank sets for banks lending to each other overnight, and it is the main lever that flows through to variable home loan rates. MacroBusiness, reporting on the weekend's results, noted that the market weakened just days before a meeting widely expected to lift rates, and it is reasonable to think plenty of buyers chose to hold back until they know where their repayments are heading.

If you are buying your first home

For a first home buyer, a quieter auction room can look like an opportunity, and in some respects it is. Less competition means fewer bidding wars pushing a property well past what you budgeted for. But it is worth holding two thoughts at once here. A rate rise does not just affect the seller's side of the equation. It also affects how much a bank is willing to lend you, because your repayments on any given loan amount go up along with the rate. So the softer competition at auction does not automatically translate into an easier purchase once your own borrowing power is taken into account. The sensible move is to know that number before you start bidding, not after.

If you are upgrading

If you are upgrading from one home to another, the calculation cuts both ways. You may find less competition for the home you want to buy, which is welcome. But you are also likely selling into that same quieter market, which can mean a longer campaign or a result closer to the lower end of expectations. Talking to your agent about realistic pricing for your own sale, alongside understanding what a higher rate does to your new loan, gives you a much fuller picture than looking at either side alone.

If you are investing

For property investors, the message is less about missing a bargain and more about testing your numbers properly. Holding costs rise every time the cash rate does, and rental income does not always keep pace in the short term. If you are weighing up a purchase in the next few weeks, it is worth stress testing your serviceability, meaning your ability to comfortably meet loan repayments, at a rate a percentage point or so above what you would pay today. Lenders already go further than this in their own assessments, generally testing your application at a rate three percentage points above the one you would actually pay, so working through the numbers yourself first tends to avoid surprises later.

What this does and does not tell us

None of this means the market is about to fall over, and a single weekend of auction data, even across two capital cities, is not a verdict on the year ahead. Clearance rates move around from week to week for all sorts of reasons, and Tuesday's decision itself is not locked in until the Reserve Bank actually announces it. What Saturday's results do tell us is that plenty of buyers are choosing to wait and see rather than commit this week, and that is a reasonable instinct.

If you are weighing up whether to buy now or wait for more clarity after Tuesday, the most useful thing you can do either way is understand exactly what you can borrow under a higher rate, not just today's rate. That is a conversation worth having with your broker before you walk into your next auction, not after you have already put in an offer.

Clearance rates quoted are Domain's figures for the week of 20 to 26 September 2026. Other data providers, such as Cotality, publish slightly different weekend figures from their own collection of results. Cash rate figures reflect the setting ahead of the Reserve Bank's meeting on 29 September 2026.

This article is general information only and does not take into account your personal objectives, financial situation or needs. Please speak with a Claremont Financial broker before making any borrowing decision.