Sydney’s property market is only “just keeping its head above water” with almost half of homes failing to sell under the hammer last weekend.

Revised data shows the success rate of homes selling at auction in February was teetering around the 60 per cent mark, but the last two weekends just 56.1 per cent of homes across Sydney sold.

This compares to 78 per cent of homes selling on the same weekend last year.

“That is what I would say is a soft market and a market that is just keeping its head above the water,” property analyst and managing director of SQM Research Louis Christopher said.

“[It is] likely flat right now or indeed it may be correcting itself,” he said.

It’s even worse for those trying to selling their homes in specific regions of Sydney where less than half of homes are now selling at auction.

Sydney’s north west, for example, has witnessed a steady downwards trajectory with 78 per cent homes selling in April 2017 but dropping to 47.5 per cent by year’s end.

In February, 49.8 per cent of homes in the region sold.

Director at Benson Auctions Stuart Benson, who works predominantly in the area, said the north-west was experiencing “a hangover after the party”.

“We’ve seen a boom due to land release and infrastructure like the NorthWest rail link. We saw huge price growths from 2015 and 2017 but the fundamentals weren’t there to continue the huge increase in prices,” he said.

Sellers across Sydney are also displaying more nerves than usual, which translates into an increasing number of homes being withdrawn from auction.

In August 2016, 11.6 per cent of homes were withdrawn but by November last year that figure rose to 33 per cent. Although the numbers have improved, almost one in four sellers in February decided not to go ahead with their auction as planned.

“When you have a four-to-five week campaign the agent and the vendor themselves are really able to gauge the level of interest and when it comes closer to the auction when the level of interest is low quite often is they’ll withdraw from auction,” Domain’s data scientist Dr Powell said.

The deluge of stock and a flat-lining of prices meant there was less urgency from buyers with Dr Powell expecting more vendors to accept offers ahead of auctions.

In a sign of the times, there are no scheduled auctions this weekend for real estate agency Phillips Pantzer Donnelley.

Debbie Donnelley, a partner at the agency, said the majority of their listings this year had sold prior to auction.

“It’s been happening all year. So if we’ve got the buyers then we’re happy to negotiate,” Mrs Donnelley said.

“When you get a great amount of stock on the market the buyers are spread thinner. The lack of stock on the market is what has driven the market,” Mrs Donnelley said.

Mr Christopher said the downturn was a result of a regulatory double-whammy when APRA cracked down on interest-only home loans and the federal government clamped down on tax deductions and depreciations on investor property related expenses and items.

“[The tax changes are] effectively cutting back on negative gearing. It didn’t get a lot of media at the time … but the real big hit in our view was no longer being able to claim plant and equipment depreciation [fixtures and fittings],” Mr Christopher said.

Cooley auctioneer Damien Cooley said he too had noticed investors deserting property since the regulatory changes.

“I think there are a lot of people potentially redirecting their money into other investments instead of buying a two-bedroom unit and renting it out. There’s not real short-term gain right now,” Mr Cooley said.