Sydney's clearance rate was 41.2 per cent on preliminary figures compiled by Domain, which is majority-owned by Fairfax, the publisher of The Australian Financial Review.

That is likely to be revised down to between 34 per cent to 37 per cent when full results come in, according to Mr Christopher. On CoreLogic's preliminary figures, the Sydney rate was 48.4 per cent.

Sydney's clearance rate hit a record low of 33 per cent in July and August of 1989 as interest rate climbed to 17 per cent, according to Mr Christopher.

"We think the market has deteriorated over the course of the last 30 days. We're getting to record lows in terms of auctions clearance rates now," he said.

'This will affect the economy'

"Prices are probably now falling at a faster rate than where they were mid-year.

"My concern is that we are just not seeing any language from the Reserve Bank to suggest that they are concerned by this.

"If you assume they are not going to be in the market cutting rates over the next six months, then it's going to be an extraordinarily weak market over that time.


"It seems at this stage they are reluctant to tie in any connection between a falling Sydney and Melbourne housing market and the economy.

"This will affect the economy. The 2017 first home buyers who bought on a 10 per cent deposit, they're probably in negative equity right now.

"How would you respond if you were sitting on negative equity? You would probably want to cut spending and try to save more to get yourself out of the situation."

Melbourne's clearance rate was at 48.2 per cent on preliminary figures from Domain, up from 34.7 per cent last week, a record low for th spring season although it was also effectively a long weekend for many ahead of the Melbourne Cup.

Nationally the clearance rate was 45 per cent, up from last week's finalised figure of 38.6 per cent.

On CoreLogic's preliminary numbers the auction clearance rate over the past week is 46.8 per cent nationally. This week's final clearance rate could come in lower again, potentially nudging the low 40 per cent range, it said.

Working harder to sell

As clearances lag and with Sydney property prices falling 7.4 per cent over the year, agents are working harder to make sales.


One of the lucky ones was McGrath's Simon Exleton, who sold the four-bedroom home at 8 Illawong Avenue in the Sydney beachside suburb of Tamarama for $3.1 million after it was passed in at auction on Saturday.

With three registered buyers, bidding began at $2.8 million before it was passed in at $3 million.

Mr Exleton then negotiated throughout the day with the highest bidder and encouraged him to increase his offer.

The vendor reduced his reserve slightly before contracts were exchanged at 4pm.

"Competition didn't drive the price up to what we would have achieved earlier in the year. It's come off the boil between 5 and 10 per cent," Mr Exleton said.

"Everything sells, it's just a matter of price.

"You've got to work hard in these markets, you've got to nurse all your buyers along."

The most expensive property sold in Sydney over the weekend was a five-bedroom home at 29 Hezlet Street in Chiswick, which changed hands for $5.95 million.

In Melbourne, a four-bedroom home at 29 Dorrington Avenue in Glen Iris sold for $3.85 million.

In Adelaide, the clearance rate hit 47.5 per cent while in Brisbane it was 32.1 per cent, on preliminary figures from CoreLogic.