Ms Bloom said agents who over-quoted property values are being forced to review their original price in line with falling market expectations.

Many properties coming up for auction have been on the market for more than 12 months, have been passed in once, failed to find any expressions of interest among private buyers, and are put back on the market with a second agent.

For example, Melbourne’s most expensive weekend sale at Mernda Road, Kooyong, a leafy dress circle suburb about 7kms south-east of Melbourne’s central business district, sold for about $4.7 million after being passed in.

The four-bedroom, luxury 1930s property, which had been on the market for about 12 months, was on offer for about $5.5 million and, at the height of the property boom, would likely have sold for about $6 million, according to agents.

Jeremy Fox, who sold the property for RT Edgar, said a lot of properties are being repriced to find a buyer. Mr Fox said he was the second agent to handle the Mernda Road property.

“The market could be bottoming out a bit,” said Mr Fox. But he is nervous about the impact on supply of any future Labor government's changes to negative gearing allowances for investors.

In Sydney’s North Shore, a one-bedroom apartment sold under the hammer to an investor for $728,000, or about $13,000 above reserve.

A two-bed, two-bath renovated apartment in Wollstonecraft, 4kms north of Sydney, sold under the hammer for $1.26 million, fractionally above reserve.


"Prices have come off about 10 per cent in the sub $1.2 million to $1.3 million market. For the right property buyers are willing to jump in and compete," said Tom Scarpignato, an agent for Belle Property in Neutral Bay.

According to CoreLogic, which monitors sales, preliminary combined capital clearance rates for the weekend were about 58 per cent, compared to about 62 per cent for the same weekend last year. It was the second highest number for the year.

About 63 per cent of Sydney properties up for auction sold and around 55 per cent in Melbourne.

Adelaide was just above 60 per cent while Canberra posted 56 per cent, Brisbane 49 per cent and Perth about 42 per cent. A rate was not available for Hobart, which had seven auctions.

About 2270 dwellings were auctioned on the weekend compared to nearly 4000 for the same weekend last year.

Sluggish markets and low sales volumes are also putting financial pressure on real estate agencies, many of which expanded rapidly during the property boom and are facing reduced volumes.

For example, leading real estate agencies Sydney-based Belle Property and Melbourne's hockingstuart have merged in the biggest known consolidation of agencies in Australia.

Industry specialists predict more mergers, layoffs and closures if markets continue to weaken.