Mr Rahimi said open house inspections have also fallen by 60 per cent but listings have increased. "On average, we used to have about 18-20 people attending open homes seven or eight months ago, but now we're finding an average of about seven people attending. Most buyers are confused about the market and holding off."

"Even buyers themselves are telling us that things are cooling! Everytime the media says the market has cooled, people delay."

Sellers are 'panicking'

Mr Rahimi warned the "bubble" had already burst and sellers were panicking. This started about two months ago.

"Owners think they need to move now so they drop the price and it keeps rolling on," he said.

An average two-bedroom in Merrylands now costs between $460,000 and $480,000. Two months ago, they were about $480,000 to $500,000, Mr Rahimi said.

A three-bedroom is about $750,000, down from about $850,000.

He has clients who have sold their homes to cash in on the market and are renting in the interim to buy their houses back at a cheaper price.


"We are worried," LJ Hooker Merrylands' Peter Tannous said.

"Many of our buyers have borrowed to the hilt up to 90 to 95 per cent of the property. We are concerned that history will repeat. It's bad."

Pressure on sellers

Mr Tannous' five-bedroom listing at 40 Strickland Road in Guildford has been on the market for six weeks. Two months ago he would have sold it in a day.

Its asking price of $1 million has been revised to offers over $899,000.

"The seller had a chance to sell the home with a granny flat for $960,000 two weeks ago," he said.

"But she was optimistic and wanted $1 million. Over the weekend she lost $60,000, after the paper said the market had dropped."

Mr Tannous said the west has always been more vulnerable with many borrowing a lot against their lower incomes.

"It's a western Sydney thing," Mr Tannous said.

"If the banks move, a lot of borrowers will be hurt."

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