The share of homes listed via auction has dropped from a peak of 45 per cent in November 2025 to just over 30 per cent in June, according to data from property analytics firm Cotality.
Cooling buyer demand has reshaped the market and driven more sellers towards listing their homes via private treaty, said Cotality head of research Gerard Burg.
"During times of strong demand, vendors clearly favour auctions as competition between multiple bidders can result in a higher price," Mr Burg said.
"However, they have been shying away more recently in this weaker demand environment.
"This has been seen in an increasing tendency to sell ahead of the auction date as well as a rise in withdrawals, pointing to vendors who are increasingly unwilling to test the market at an auction and have the property fail to sell."
Like auction clearance rates, home prices have been cooling for months as Reserve Bank rate hikes, rising inflation and global economic uncertainty hit buyer sentiment.
Changes to negative gearing and capital gains tax concessions in the May budget further sapped demand from property investors.
Sydney home prices fell 1.2 per cent in June and are 3.7 now below their peak in January, while Melbourne values are four per cent below their March 2022 high.
But David McMahon, Ray White head of auctions for NSW, said it was a stretch to call it a buyers' market.
"I think it's a pretty fair market," he told AAP.
Sellers tended to move away from auctions whenever the market weakened, but there was still value in going through the auction process, Mr McMahon said.
When comparing an auction campaign, including the two weeks following auction day, to a private treaty process over the same period, auctions still offered a higher clearance rate, he said.
But many agents discouraged vendors from going to auction, Mr McMahon said.
"No one likes standing on auction day with no bidders and not selling."
Although the auction market tended to slow down during the winter months, the current downturn had gone beyond regular seasonal factors, Mr Burg said.
"What we have observed over the past few months has been a steady decline in sales volumes as demand-side pressures have built, meaning that there have been fewer buyers in the market," he said.
Despite the fall in listings, the auction share is still above the long-term average of around 28 per cent, suggesting private sales will continue to take a bigger slice of the market.
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