Across the four standard auction weeks in May 2026, Melbourne’s clearance rate averaged just 55% — ranging from 52% to 57% week to week — with more than 1,200 properties passed in across the month, according to Domain. That compares to clearance rates of 68–70% at the same time last year. For buyers, auction negotiation in Melbourne has never been more important to understand.
For many buyers, auction day feels like the finish line.
In reality, when a property passes in, the negotiation is often only just beginning.
At LP Advisory, we’ve helped clients secure homes both at auction and through post-auction negotiations. In many cases, the best outcome isn’t achieved by making the highest bid. It’s achieved by understanding the seller’s position, reading the market and knowing when not to bid at all.
Why More Properties Are Passing In
When auction clearance rates are high, strong competition often pushes properties beyond reserve and into a successful sale under the hammer.
As buyer demand becomes more selective and affordability pressures remain, we’re seeing more properties pass in across Melbourne.
For buyers, this can create opportunity.
But it also changes the process dramatically.
At auction, everything is transparent. You can see who is bidding, where the competition sits and how the campaign is unfolding.
Once a property passes in, negotiations move behind closed doors and buyers are often relying on information provided by the selling agent.
Understanding how to navigate this stage can have a significant impact on the final purchase price.
The Biggest Mistake Buyers Make After a Property Passes In
Many buyers assume a passed-in property automatically means they have the upper hand.
That isn’t always the case.
The selling agent still represents the vendor and is focused on achieving the highest possible price.
Buyers are often told there are multiple interested parties, that another offer is coming or that the vendor won’t move on price.
Sometimes that information is accurate. Sometimes it’s part of the negotiation process.
The challenge is understanding what information matters and how to respond strategically.
Case Study: Why We Chose Not to Bid at All in Parkville
One of our recent purchases in Parkville is a perfect example.
Prior to auction, we had completed extensive due diligence and formed a clear opinion of value. We also believed the vendor’s expectations were significantly above market value.
Based on conversations throughout the campaign and feedback from the market, we felt there was little chance the vendor would meet the market on auction day.
Rather than bidding and potentially encouraging the vendor’s expectations, we made the decision not to participate.
The property passed in.
We then allowed the weekend to pass before re-engaging with the agent on Monday.
By this point, the dynamics had changed. The excitement of auction day had disappeared, the vendor had received market feedback and the negotiation became far more realistic.
Our client ultimately secured the property at a price we believe would have been difficult to achieve had we actively participated in the auction.
Sometimes the best auction strategy is not bidding at all.
Case Study: Why We Wanted the Property Passed In to Us in Richmond
Every auction requires a different strategy.
A recent Richmond campaign demonstrated the opposite approach.
During the campaign, we were aware of several parties who had completed building and pest inspections and had previously expressed interest in purchasing the property.
In this situation, we believed competition was genuine.
Our objective wasn’t necessarily to buy the property under the hammer. Instead, we wanted to ensure the property was passed in to our client.
Why?
Because the highest bidder at auction typically receives the first opportunity to negotiate directly with the vendor.
We knew that securing that negotiating position would give our client an advantage over other interested buyers.
The property passed in to our client and we were able to negotiate directly with the vendor before other buyers had the opportunity to enter discussions.
That strategy ultimately helped secure the property successfully.
What Buyers Should Know About Auction Negotiation in Melbourne
Understand Why the Property Passed In
Not all pass-ins are equal. Some vendors have unrealistic expectations. Some are testing the market. Others are highly motivated to sell but simply missed their reserve.
Understanding the reason behind the pass-in helps shape your negotiation strategy.
Know Your Walk-Away Price
Before negotiations begin, determine the maximum amount you’re willing to pay. Once emotions become involved, it becomes much harder to make objective decisions.
Don’t Let Urgency Dictate Your Decisions
A common tactic during post-auction negotiations is creating urgency. Sometimes there is genuine competition. Sometimes there isn’t.
The key is understanding the broader context of the campaign and the property’s level of interest.
Focus on Value, Not Winning
Successful buyers don’t focus on “winning” the negotiation. They focus on securing the right property at a fair market price.
Paying slightly more for the right property can be a smart long-term decision. Overpaying because of poor negotiation strategy rarely is.
Why Auction Experience Matters
At LP Advisory, auction negotiation in Melbourne forms a significant part of what we do.
Our Director, Lou Lihari, is a licensed auctioneer who has spent more than two decades in the real estate industry.
Having stood on both sides of the process — as an auctioneer, agent and buyers agent Melbourne — he understands how auction campaigns unfold, how vendors make decisions and how negotiations often evolve once the auction has concluded.
That experience helps our clients make informed decisions before, during and after auction day.
Final Thoughts on Auction Negotiation in Melbourne
As Melbourne’s clearance rates soften, buyers need to be prepared for more than just auction day. Increasingly, the real negotiation happens after the auction has finished.
Whether the right strategy is to bid aggressively, secure first negotiating rights or avoid bidding altogether depends on the individual property, the competition and the vendor’s position.
There is no one-size-fits-all approach. The key is understanding the situation, having a clear strategy and being prepared for what happens once the property passes in.
If you’re considering buying at auction, our team can help develop a strategy tailored to the property, market conditions and your goals.
