The latest auction data showed a preliminary Melbourne liquidation rate of 43.5 percent, replacing Sydney as the weakest property market in Australia.
Last weekend Melbourne's final figure was 46.2 percent, with Core Logic counting more than 1400 auctions this week, which is expected to fall to about 41 percent, the weakest in six years.
Sydney's nearly 900 auctions, preliminary at 48.5 percent, are likely to fall to about 43 percent, but show a slight improvement from last week's preliminary 42 percent. Domain auction results show a similar trend.
CoreLogic National auction Market commentator Kevin Brogan said Sydney's auction liquidation rate was stronger than Melbourne's, indicating that Melbourne's sellers have yet to accept the weakness of the market.
"as the market weakens, sellers have to adjust their expectations. The seller's expectation is one of the factors that may affect the liquidation rate of the auction.
"if you refuse to set a floor price based on market conditions, it will be more difficult to sell successfully."
Prices in Melbourne have fallen 4.7 percent over the past year, while prices in Sydney have fallen 7.4 percent, according to CoreLogic.
With markets weak in the past few months, Melbourne sellers have two big advantages over Sydney: cheaper and more affordable properties; less investment, less affected by the credit crunch; and a higher liquidation rate at auction.
But he said the results of this week's auction showed that Melbourne's auction market was under greater pressure than Sydney, meaning the balance of supply and demand had been broken.
Melbourne buyers still lack a sense of urgency.
Shane, chief economist at AMP Capital. Oliver Shane Oliver made a similar point, tweeting over the weekend that the market was "starting to look weaker than Sydney."
"the credit crunch, increased supply, reduced foreign demand and continued weakness in the housing market," Dr. Oliver said.
"fear of copying in the middle of the mountain, negative deductions and possible changes in capital gains tax" all have an impact on housing demand, he added.
Nationwide, the initial liquidation rate was 45.5 percent, compared with 42.7 percent at last week's final auction, the lowest since June 2012, and is expected to fall below 45 percent for the third consecutive week.
In the smaller auction market, Adelaide's 113 auctions, 64.4% of the initial liquidation rate was highest; Brisbane's more than 150 auctions, 40.3%; Canberra, 48.4%; Perth, 30.3%.
Emma Bloom, a buyer's agent for Morrell&Koren, said Melbourne's A $5 million market was "really hurt."
"you can feel the Melbourne market is in shutdown mode," Bloom said.
Take the 32 Closeburn Avenue Prahran auction she attended over the weekend-a four-bedroom Edward house that the seller bought for A $1.75 million three years ago.
"there was only one seller, A $1.9 million, and the auctioneer really did his best to get a buyer's offer."
"at last a bidder added a thousand and the auctioneer accepted the deal. I've never seen anything like this in my career. "
