Nearly 1900 homes went under the hammer in Australia's capital cities on Saturday, but just 47.4 per cent of them sold, according to property research firm Cotality.
The number of auctions was likely to reduce further over the coming weeks because of a seasonal downturn and weaker selling conditions, Cotality research director Tim Lawless said on Sunday.
Investor groups have warned the federal government's decision to wind back negative gearing and the capital gains tax concession will make housing a less appealing investment.
But the government still wants house prices to increase, senior minister Tanya Plibersek said on Monday.
"What we anticipate over time is not that house prices will continue to fall, but that they will grow more slowly," she told Seven's Sunrise program.
"House prices have been growing too fast, and that's meant that young Australians haven't been able to afford a home of their own."
Treasury modelling showed there would be a short-term hit to house prices from the government's changes to negative gearing and capital gains tax, but growth would continue in the long run, Environment Minister Murray Watt said.
"We're investing enormous amounts of money also to build up the supply of new housing, but we also had to do something with the demand side as well," he told ABC News Breakfast.
Pressed repeatedly on whether he'd like to see house prices fall, Nationals Leader Matt Canavan said he wanted more cheap homes to be built.
"What we need to do is make some homes more affordable ... that doesn't necessarily mean that people who own existing houses see their prices fall," he said.
"It's not about them falling... that's the most important asset in Australians' balance sheet. But we can make housing more affordable to create more supply," Senator Canavan said.
