Clearance rates again crashed to record lows over the weekend, with the lure of the increased first-home owners grant failing to offset buyers' concerns about the global financial crisis.
In Sydney, the auction clearance rate plummeted to 39.6 per cent, 10 points lower than the figure recorded last weekend and 24 per cent lower than the figure recorded for the same weekend last year.
In Melbourne, the clearance rate fell 7 points to 45 per cent, 32 per cent lower than the figure recorded for the last weekend in October last year.
Australian Property Monitors senior economist Liam O'Hara said buyers were wary because of the international economic crisis.
"It's a 50-week low for Sydney," he said. "It's a downward-looking market, despite the increase to the home buyers grant. "There's a lot of volatility there and it doesn't look good (to potential buyers).
"People are still concerned about how the crisis will affect Australia, they're assessing their options and unloading debt at the moment. A lot of analysts are predicting unemployment will rise to the 7 to 9 per cent mark next year."
However, BIS Shrapnel managing director Robert Mellor said there was no reason for home buyers to be hesitant.
"It's a very good time to upgrade a property, people need to remember that if the value of their house decreases, it will be the same story for other property owners," he said.
"Interest rates are down and are expected to be cut again."
Melbourne agent Gary Peer had 18 properties listed for auction at the weekend, selling 12 of them. "The market's definitely changed. I don't think people are as confident as they were.
"Everybody's a little bit uncertain at the moment ... the buyers are a little bit slower to part with their money than they were in the past, which is understandable given what's been going on in the world," he said.
Six months ago, Mr Peer said, the auction clearance rate would have been almost 80 per cent.
"We're down in the 60s now. That's certainly very different from this time last year when it was very unusual not to sell a property. There were many weekends where there was a 100 per cent clearance rate," he said.
In Brisbane, the clearance rate over the weekend was a dismal 22 per cent, eight percentage points lower than last weekend and 29 percentage points lower than the figure recorded for last year.
But the market was better in Adelaide, with the clearance rate climbing 16 points from last week to 56 per cent - still well below the figure of 74 per cent recorded for the same weekend last year.
