Aussie Home Loans' John Symond backed the same outlook.

"I think it will fall out over the next six to 12 months, where you might see 4 to 5 per cent [rise] in some areas, no increase in other areas.

"And then it will just flatten out for a few years. That's Melbourne. I think Sydney is heading to the same place," he said.

'Cooling premature'

But other developers and real estate agents have responded to the possible slowdown of the Sydney and Melbourne property markets with a resounding "What cooling?"

The host with the most, John Symond at home in Point Piper. Michele Mossop

The chairman of Meriton Apartments, Harry Triguboff, said his apartment market had weakened in April but recovered in June and was now "very strong." He added Meriton is "mostly lifting prices."

Mirvac boss Susan Lloyd-Hurwitz said: "We certainly are pedalling as hard as we can right now. But it is cyclical, so we do recognise that there are cycles and certainly the Sydney market has to be towards the top of its cycle by any measure that you would care to look at."


Agents said auction clearance rates alone should not be used as a barometer to gauge where the market is at.

"Calling the demise of the property market is premature. It still has a long long way to go," said Douglas Driscoll of west Sydney agents Starr Partners.

"Sure, the herd mentality from six to 12 months ago has diminished, but let's look at clearance rates in perspective," he said.

"If you go back three weeks, 280 properties being sold, last week was nearly twice as much. It is simple maths, the more properties for sale, there will be slightly lower clearance rates. And don't forget those properties sold privately – there are a numerous such transactions taking place."

The 'greed stage'

Century 21 Australia chairman Charles Tarbey said "a lot of people are at the greed stage".

"They are testing market and many have passed in. Clearance rates for the major cities, for example, are 10 per cent than this time last year. And last year they were calling it a boom."

National auction volumes had risen to 2378 last weekend, up from 1903 the previous week, the largest of capital city auctions held in 10 weeks, CoreLogic RP Data said.


This has prompted a lot of speculation that the two-horse race could be slowing and prices were on their way down.

One lacklustre auction on the weekend was a small entry-level deceased estate terrace in the heart of inner city Paddington, Sydney.

'It's not time to ring the bell'

The two-bedroom terrace, which needed work, was advertised with a price guide of $1.4 million. Two bidders fronted the auction, opening the bidding at $1.3 million and moving casually to $1.38 million.

McGrath Real Estate auctioneer Adrian Bo put in a vendor bid of $1.4 million and there it finished, with neither bidder wanting to go further. The home is now up for sale at a price guide of "over $1.46 million."

Two McGrath auctions in Mosman and Neutral Bay in Sydney's popular lower north shore were also withdrawn.

"But it's not time to ring the bell and say it's over," Australian Property Institute's national president Tyrone Hodge said.

"There is a lot of chatter in the industry and in the media, which can be a self-fulfilling prophecy."


"If you look at the fundamentals, we still have lack of supply and a growing economy. The only real change is banks increasing the hurdle rate for lending, and that takes out more supply which puts more pressure on prices.

"Very high expectations cause a lot of auctions to pass in. These are not fundamentals."

New projects steam ahead

Mr Hodge, who deals directly with developers, said new projects were still streaming in.

David Milton of CBRE, another big seller of off-the-plan apartments, said he has seen similar rates of sale all year.

"Sure the market is not rising at the rapid rate from about 12 to14 months ago, but this is not feeding into the apartment market," he said.

ACProperty.com.au's director, Esther Yong, who advertises to Asian local and foreign buyers, has instead seen a rise in demand this month compared to last month. Asian luxury property agent, Black Diamondz' Monika Tu has 50 parties waiting to buy properties.