Key takeaways
More sellers are moving away from auctions. Private treaty sales are becoming increasingly common as buyer competition eases.
Auction-to-private-treaty conversions have surged. More than half of auction-launched listings across the five major auction markets are now converting to private treaty.
Premium markets are experiencing some of the biggest shifts. Traditional auction strongholds in Sydney and Melbourne are increasingly turning to private sales.
Buyers are gaining greater negotiating power. Softer competition is forcing vendors to become more flexible with their selling strategies.
Changing conditions can create opportunities for investors. The key is buying quality properties at the right price rather than simply chasing discounts.
Something interesting is happening in Australia’s property market, with auction clearance rates only telling part of the story.
Auctions work best when several motivated buyers compete for the same property, creating urgency and pushing prices higher.
But as buyer demand has softened in 2026, that competition has become harder to generate.
New Domain research shows sellers are responding by changing their strategy. More are choosing private treaty from the outset, while a growing number of properties originally listed for auction are switching to private sale during the campaign.
As Domain’s Chief Residential Economist Dr Nicola Powell explains:
“Auctions tend to perform best when there are multiple buyers competing for the same property. As buyers gain more choice and competition eases, creating that auction-day momentum becomes more difficult.”
And that shift tells us something important about the changing balance of power between buyers and sellers.
Sellers are changing course
Domain’s September analysis shows just how dramatically seller behaviour has changed in only a few months.
In Sydney, the proportion of properties launched for auction that subsequently converted to private treaty increased from 24.9% in February to 56.3% in July.
Melbourne experienced a similar shift, jumping from 29.3% to 58.1%.
But this isn't simply a Sydney and Melbourne phenomenon.
Table 1. Proportion of auctions converting to private treaty and listings starting as private treaty
| City | % of auctions converting to private treaty |
% of listings starting as private treaty |
||||
| Feb 2026 | July 2026 | % Uplift | Feb 2026 | July 2026 | % Uplift | |
| Sydney | 24.9% | 56.3% | 126.1% | 73.1% | 83.1% | 13.7% |
| Melbourne | 29.3% | 58.1% | 98.3% | 67.9% | 79.9% | 17.7% |
| Brisbane | 36.6% | 67.6% | 84.7% | 90.9% | 92.1% | 1.3% |
| Adelaide | 29.1% | 59.6% | 104.8% | 74.6% | 83.5% | 11.9% |
| Canberra | 28.1% | 62.5% | 122.4% | 57.9% | 72.3% | 24.9% |
Brisbane’s conversion rate increased from 36.6% to 67.6%, Adelaide rose from 29.1% to 59.6%, while Canberra jumped from 28.1% to 62.5%.
Across the five major auction markets analysed by Domain, around three in every five auction-launched listings are now ultimately converting to private treaty.
According to Dr Powell:
“Conversion rates are now at their highest level since the 2022-23 housing downturn, indicating that sellers are becoming more responsive to changing market conditions.”
But it's important to realise that this doesn't necessarily suggest widespread vendor distress.
Domain's analysis found that sellers aren't withdrawing from the market altogether. Instead, they're changing their method of sale as conditions become more challenging and buyer competition becomes harder to generate.
Perhaps the most interesting part of Domain's research is that some of Australia's traditional auction strongholds have experienced the largest shifts.
In Sydney's Eastern Suburbs South, the proportion of auction campaigns converting to private treaty increased from just 12.3% in February to 52% in July, more than quadrupling in five months. Eastern Suburbs North increased from 15.1% to 56.7%, while North Sydney-Mosman climbed from 15.4% to 50.6%.
Melbourne tells a similar story. Boroondara's conversion rate rose from 25.1% to an extraordinary 74.7%, while Glen Eira increased from 22.1% to 60.6%.
Table 2. Top 10 SA3 regions by growth in auction-to-private-treaty conversions
| Region | City | Feb 2026 | July 2026 | % Uplift |
| Eastern Suburbs – South | Sydney | 12.3% | 52.0% | 324.2% |
| Eastern Suburbs – North | Sydney | 15.1% | 56.7% | 274.8% |
| North Sydney – Mosman | Sydney | 15.4% | 50.6% | 227.4% |
| Moreland – North | Melbourne | 20.2% | 62% | 206.8% |
| Warringah | Sydney | 20.8% | 62.9% | 202.2% |
| Boroondara | Melbourne | 25.1% | 74.7% | 197.3% |
| Leichhardt | Sydney | 15% | 43.9% | 192.4% |
| Keilor | Melbourne | 19.4% | 56.3% | 190.3% |
| Glen Eira | Melbourne | 22.1% | 60.6% | 174.5% |
| Belconnen | Canberra | 20.2% | 54% | 167.6% |
This is particularly significant because these higher-value markets have traditionally suited auctions well.
Quality properties tend to be scarce, buyers can become emotionally attached to them, and competition between several financially capable purchasers can produce excellent results for vendors.
However, premium buyers are also often discretionary buyers. They generally have greater flexibility over when and what they purchase, which means they can afford to wait when they're uncertain about market conditions.
Once there are fewer serious bidders standing around on Saturday afternoon, an auction loses much of its power.
- Also read:Property Investors: Don’t Be Fooled by August’s Rental Figures | Property Insiders
- Also read:Latest Property Price Forecasts. Australian Property Market Outlook 2026-2027: Navigating a Market Correction
- Also read:This week’s Australian Property Market Update – Latest Data, State by State September 8th 2026
- Also read:National Weekly Auction Report – September 5th 2026 | Positive Auction Start to Spring for Melbourne and Sydney
- Also read:National Property Listings Ease in August but Remain Well Above Last Year | Latest SQM Listing Data
More sellers are bypassing auctions altogether
Another important part of this story is that sellers aren't merely changing course after an auction campaign begins. Increasing numbers are avoiding auctions altogether.
Between February and July, the proportion of Sydney properties launched as private treaty increased from 73.1% to 83.1%.
Melbourne rose from 67.9% to 79.9%, Adelaide from 74.6% to 83.5% and Canberra from 57.9% to 72.3%.
Brisbane was already overwhelmingly a private treaty market, but even there the proportion increased from 90.9% to 92.1%.
Dr Powell says:
“Importantly, sellers aren’t stepping away from the market; they’re adapting their strategy. Private treaty offers greater flexibility around price and negotiations, making it an attractive alternative when buyer demand is more measured.”
Domain describes the auction market as “shrinking from both ends” because fewer vendors are entering the auction system in the first place and fewer of those who do are staying there.
That makes auction clearance rates alone a less complete measure of market conditions. If increasing numbers of properties never make it to auction, or are converted to private treaty during their campaign, the headline clearance rate doesn't tell you everything that's happening beneath the surface.
Buyers are gaining negotiating power
For property buyers and investors, this changing sales environment is important because it tells us something about the balance of negotiating power.
At an auction, buyers compete openly against each other and the highest bidder determines the price. Private treaty negotiations are very different. Buyers don't necessarily know how many other genuine purchasers are interested, what they have offered or how motivated the vendor may be.
Dr Powell describes what is occurring as a market “recalibrating”, with buyers gaining more negotiating power and sellers responding by choosing sales methods that better suit current conditions.
That can create opportunities for well-prepared buyers, particularly where a property has already been through an unsuccessful auction campaign and the vendor's expectations are beginning to adjust.
However, investors need to be careful because a cheaper property isn't necessarily good value.
There isn't one Australian property market. There are markets within markets, and even during softer conditions, investment-grade properties in desirable locations with strong owner-occupier appeal can remain tightly held and attract significant competition.
At the same time, secondary properties can sit unsold for weeks or months and eventually sell at substantial discounts.
In my mind, softer markets make asset selection more important rather than less important.
The bottom line
Domain's research gives us another sign that Australia's property markets are moving through a different stage of the cycle.
Weak auction clearance rates have already told us buyer competition has softened, but the growing shift toward private treaty shows how vendors and selling agents are responding.
For financially prepared buyers, that can mean more time to undertake due diligence, less pressure to make decisions in the emotionally charged environment of an auction and, in some circumstances, greater negotiating power.
But the aim shouldn't be to find the vendor prepared to offer the largest discount. It should be to use this period of reduced competition to secure the right property at the right price.
Property markets continually move through periods when bargaining power shifts between buyers and sellers, and today's more balanced conditions won't last forever.
Eventually confidence will improve, competition will strengthen and auction conditions will change again.
In the meantime, strategic investors with strong finances, a clear investment plan and the patience to concentrate on high-quality assets may find that a market in which other buyers are more cautious gives them opportunities that were much harder to find when auction rooms were crowded and buyers were afraid of missing out.
