"The last time Sydney and Melbourne hit the lowest point was in July 1989 when the Reserve Bank of Australia hiked the cash rate to 17 per cent. Both cities saw auction clearance rates plunge to 33 per cent.

Buyers had become very wary and would have dropped out simply because there's so much economic uncertainty around. — Shane Oliver, AMP economist

"This week will go down in history as one of the worst weeks for the auction market."

More than two in five (45.2 per cent) homes listed for auction were pulled from the market, up from 9.5 per cent last week, as the ban came into effect on Wednesday from midnight.

"The surge in withdrawn auctions was expected, considering the rising level of uncertainty from both buyers and sellers, coupled with the shift towards remote auctions which may take some time for the market to adjust to," said Kevin Brogan, an analyst at CoreLogic.

More than one-third (36 per cent) of homes listings were sold prior to auction, up from 22 per cent a week before, as vendors raced to offload their properties before lockdown policies potentially escalated.

Horrible week


"It was a horrible week for property," said Shane Oliver, chief economist with AMP Capital.

"The auction clearance rate numbers that already included online auctions were worse than what we saw during the property slump into early last year.

"I think buyers had become very wary and would have dropped out simply because there's so much economic uncertainty around.

"They are probably also wary about participating in online auctions, but I think the big issue was the sort of flood of properties trying to get in before the shutdown intensifies. So you have a mismatch of supply and demand."

Limping along

Sydney-based selling agent Shannan Whitney of Bresic Whitney said 11 properties were sold on Friday but noted that buyers' sentiment had turned weak.

"If you look back a month ago, it was in every respect a sellers' market, really strong sentiment from both buyers and vendors," he said.

"Within a month, we've seen huge amounts of jobs either lost or under threat and many buyers are withdrawing from the market. The markets are now really kind of just limping along. Any suggestions that the markets are doing fine is probably deluding themselves."


Mr Whitney said he could sense a lot of fear from buyers.

"There's definitely fear out there at the moment, so it's going to be a difficult market to transact in. It's going to be really challenging and it's hard to make sense out of it right now."

Ray White Erskineville selling agent Ercan Ersan said the weak sentiment was already showing in prices.

"From what I've seen, prices have already dropped by around 5 per cent from the peak three months ago; I think more discounting is likely to come in the future," he said.

"It's really hard to predict what's going to happen. I can only focus on what's happening now."