In a bid to secure a sale in a cooling market, Sydney homeowners are discounting their properties at their highest level in five years.

Across the city, the average discount vendors accept on originally advertised house prices reached 6 per cent over the latest quarter – the largest markdown in prices since April 2013.

The average discount accepted for Sydney units, now at 5.5 per cent, is also at its highest rate in five years.

Owners in Sydney’s lower north shore are reducing prices the most, with an average discount of 8.1 per cent for houses over the six months to March, while apartment prices were reduced 6.5 per cent.

At the region’s median house price of $2.45 million – which fell 5.2 per cent over the year to March – that’s a price drop of almost $200,000.

McMahons Point vendor Viviane realised she’d “missed the boom” late last year when her apartment passed in at auction.

“I put my place on the market when I did because my tenant left quicker than expected, which in retrospect, I’m so glad about,” she said. “If I was selling now I’d get less money.”

She ended up dropping the price from $1.2 million to $1.15 million, before the one-bedroom unit sold earlier this year for $1,050,000, through selling agent Craig Litchfield, of McMahons Point Real Estate.

“I didn’t get the exact price I wanted, but one has to be realistic,” she said. “If I did delay it would have been a lot worse.

“Some people say ‘no, I won’t accept that, it’s too low’, but who knows how long the downturn is going to last.”

While the lower north shore traditionally has one of the highest discount averages, Domain Group data scientist Nicola Powell said it was increasing in line with house prices falling.

“Discounting levels have increased and that’s probably a reflection of the market conditions … over the year the lower north shore had one of the highest drops in the median price, as did the upper north shore,” she said.

Dr Powell added with houses taking increasingly longer to sell – an average of 66 day last quarter – there was a build-up of stock on the market, meaning more competition for sellers.

The upper north shore had the second highest house discount at 7.2 per cent, followed by the city and east at 7.1 per cent.

“Because prices are higher in these areas they’re generally able to discount more, because they’re over inflated from the beginning,” said Buyer’s agent Peter Kelaher, of PK Property, noting those selling on the city’s fringes often couldn’t afford to accept similar price deductions.

Mr Kelaher noted discounts were often a result of agents and vendors aiming high at the start of a campaign to see who they “could sting” before dropping prices to meet the market.

“If you go promising vendors something you can’t achieve in the current market, you’re going to have to discount,” added selling agent Lorinda Mansfield, of Raine and Horne Neutral Bay.

Ms Mansfield said it was important that vendors did their research and were realistic with their expectations.

She is selling the three-bedroom apartment of Milsons Point resident Anderson Zhu who is realistic about prices in the current market.

“A lot of people were shocked at our decision to sell now, going ‘don’t you know you could have made more before?'” he said.

“It would have been amazing if we did sell a year or two ago, but that wasn’t right for us at the time,” he said, noting he and his wife were looking to upsize after the birth of their first child.

While the average discount for houses only increased across half of the city’s regions, when compared with the same period the previous year, discounting for apartments – while less significant – increased almost across the board.

Many regions are seeing their highest discounting for apartments in years, with both the lower north shore and north west recording price reductions not seen since 2009.

“There’s more price discounting going on and that’s consistent with a market that’s cooling,” said HSBC chief economist Paul Bloxham.

“We know there’s been an investor pull-back as well as with foreign purchasers and the combination of those two things are behind weakening demand for apartments.”

Both HSBC and SQM Research have revised their house price forecasts in recent weeks. While they previously forecasted moderated price growth to continue, they are now expecting prices to fall, off the back of a number of factors including tighter prudential settings, a boost in housing stock and a pullback in foreign demand.