Australian property auctions slump after tax reform

A prominent Sydney auction near Bondi Beach failed to attract a single bid this week, a stark sign of a rapid cooldown gripping Australia's residential property market. The failed sale of a A$5.2 million home comes as nationwide auction clearance rates have plunged to their lowest level since the COVID-19 pandemic, a downturn largely attributed to recent federal tax reforms targeting property investors.

According to data from property research firm Cotality, weekend auction clearance rates nationally have fallen to below 50 percent in the month since the government announced its policy shift, which represents the lowest point in years. Industry figures on the ground describe a dramatic drop in activity. In Brisbane, agent Avi Khan of Ray White said viewer numbers and the number of bidders for properties have halved, with clearance rates falling to between 30 and 35 percent.

The immediate catalyst is a suite of tax changes unveiled last month by the centre-left Labor government. The reforms, set to take effect from July 2027, will scrap the capital gains tax discount and ban negative gearing on existing housing. The measures are designed to reduce competition for first-home...