After a long pause, the auctioneer commissioned to sell a Sydney beachside apartment for in excess of $800,000 puts his gavel away, unable to entice a single bid.

Across town, in the city's trendy inner western suburbs, the owner of a warehouse converted into a three-level home drops his reserve price for the property's sale. There are just two potential buyers at the auction, and they have declined to enter the kind of bidding war that has caused home prices in Sydney and Melbourne to double since 2009.

The auction stand-offs may indicate that the Sydney market, which has been defined by researcher Demographia as the second most unaffordable in the world after Hong Kong, has finally hit a peak. As the buyers have drifted off, the sellers have also started to back away and the number of home listings is down 25 per cent from a year ago, according to CoreLogic RP Data.

This is all yet to show up in a decline in prices in Australia. In the nation's eight biggest cities, home prices surged a further 0.7 per cent in January even as the volume of transactions was lower. But some real estate experts and hedge fund investors say that it may be only a matter of time before prices also start to crumble.