Victoria's property market has taken a turn for the worse, with almost half the homes auctioned on the weekend being passed in.
With 420 of the 865 houses on offer over the weekend not selling, it was the worst auction week for four years.
On the up side, some buyers snapped up bargains and dictated the settlement terms.
REIV chief executive Enzo Raimondo said the economic downturn was expected to hurt house sales into the new year.
"We can't see any huge increase in clearance rate between now and the end of this selling season," Mr Raimondo said.
"If there is one positive out of this market it is that buyers with the capacity to buy or borrow can secure a home or investment property at a price they wouldn't have got last year.
"If we get some more interest rate cuts, perhaps in the first quarter of next year we might see some improvement," Mr Raimondo added.
"But the top end of the market is feeling the brunt of the economic conditions more than the mid to lower end of the market."
Victoria's real estate market has become a tale of two cities, thanks to the global credit crunch.
While the value of luxury houses in prime locations is steadfast, despite the turbulent economic times, homes in less-sought-after areas are copping a hammering at auction.
Buyers advocate David Morrell said houses that had been valued at unrealistic levels during the property boom were falling back to earth.
"If you stuck to the three rules of real estate -- position, position, position -- you're probably fine," Mr Morrell said.
"If you're on the back of a railway line, or on a main road or your house is not attractive, you're giving people an excuse not to pay a premium."
Shrewd investors who diversified their investments were also managing to stay afloat.
Mr Morrell said many investors who lived through the last recession appeared to have learned a valuable lesson and tightened their belts before the share market plummeted.
Corporate high-flyers, who spent up big during the boom times, hadn't fared as well and are selling up in droves.
A quick scan of Melbourne's real estate markets reveals which suburbs have been hardest hit by the credit crunch.
"Google Brighton and see how many properties are for sale compared to Toorak," Mr Morrell said.
"What that tells you is there is a lot more exposure in Brighton, which, in Melbourne terms, is newer money.
"The older areas like Toorak are established money, and established money has been through these experiences and has put something away for a bad year.
"You are only selling at the top end of town because you have to."
The crash of world share markets has now filtered through to the real estate market, with victims of the credit crunch looking to cut back to free up cash.
"There used to be three reasons for selling a property," Mr Morrell said.
"The first was divorce; the second was trading up or trading down; and the third was relocation.
"The new one - thanks to the global financial crisis - is margin calls."
Despite the troubled times, some investors could still find a bargain in the real estate market.
"There are marvellous opportunities for those that are cashed up," Mr Morrell said.
"You've never had a better opportunity in some cases."
