Fewer than half of the homes listed for auction in Sydney sold over the weekend – the lowest rate since the early days of the COVID-19 pandemic.

Last Saturday’s auctions marked the first test of the market since the federal government announced an overhaul of negative gearing and Capital Gains Tax (CGT) last Tuesday.

Sydney’s auction clearance rates have fallen below 50 per cent – the lowest level since the pandemic low of April 2020. (Nine / Peter Rae)

Even with just 616 homes going up for auction in Sydney on Saturday – almost 15 per cent fewer than the previous week – the clearance rate dropped to 49.2 per cent, according to Cotality data.

That is Sydney’s lowest clearance rate since auctions were heavily disrupted by COVID-19 in April 2020.

It was a different story elsewhere across the country, though, with Melbourne, Brisbane, Adelaide and Canberra all seeing modest rises in clearance rates.

Nationally, auction clearance rates crept up by 1.1 per cent to 57.5 per cent – the fifth time in the last seven weeks national clearance rates had held below the 60 per cent mark.

In Melbourne, 906 homes went to market and just over 61 per cent sold – an uptick of 3.7 per cent from the week before.

Perth had the lowest number of successful auctions out of all the capitals, with just 39 per cent of its auctions resulting in a sale.

Perth has seen astronomical gains in property prices in recent years, with home values soaring by 27 per cent in the last 12 months alone.

The federal government’s tax changes announced as part of budget measures last Tuesday include the winding back of negative gearing – a move expected to spook property investors.

As property values creep downwards in Sydney and Melbourne, Perth is in the middle of a house price boom. (Getty)

Even before this, Australia’s housing market appeared to be on the cusp of a downturn.

“Sydney and Melbourne are already five months into the early phases of decline, while growth is slowing across the mid-sized capitals,” noted Cotality Research Director Tim Lawless

“Listings are picking up as demand softens, interest rates are rising while affordability and serviceability pressures are biting.”

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