Investors no longer able to get interest-only loans have stopped buying, Domain data scientist Nicola Powell said. But some of that gap had been filled by growing populations in both cities, with owner-occupiers buying enough homes to put a cushion on a major correction.

While price rises approached 20 per cent in a year in the recent boom, prices were now falling at about 2 per cent a quarter.

Investors expect crash

But mum-and-dad investors are worried, Belle Property's Sam Shamal said.

"Many of my buyers think the market is going to crash. They are waiting for another two, three months and as a result there are not enough buyers," he said.

Mr Shamal's listing, a five-bedroom house at Hilltop Court in Castle Hill, failed to sell at auction on the weekend. The vendors were looking for $1.8 million initially but only one buyer registered to bid. They have now listed their property privately at $1.6 million.

Mr Shamal said in the thick of the boom he would have sold the Hilltop Court house for $1.8 million with up to seven bidders competing.

But even at $1.6 million the vendors, who bought the house during the global financial crisis, would make a profit.


Parramatta was even worse, Mr Shamal said.

One of Mr Shamal's recent listings, a $650,000 three-bedroom apartment in Parramatta, failed to sell. It would have sold for $900,000 during the boom.

"Parramatta is dropping faster due to the high number of apartments being built there," he said.

In Melbourne, St Kilda had not fared as well as other suburbs for different reasons, Hockingstuart's Sam Inan said. Melbourne, which was a bigger owner-occupier market and therefore a steadier auction market than Sydney, had come to the end of its "bull run", particularly for denser suburbs like St Kilda.

A rush to list before winter was also leading to larger volumes, he said.

Both of Hockingstuart's auctions on the weekend, at Wordsworth Street and Barkly Street were passed in.