Revised figures released by the Real Estate Institute of Victoria show the clearance rate last weekend was 59 per cent - two percentage points lower than initially published - because 76 estate agents failed to report properties that had passed in.
This is the lowest level since December 2008, when the market was in the middle of a slump that knocked $67,000 off the median price of a Melbourne house.
The REIV was forced to phone the agents, some of whom said they thought the properties would sell after the auction, to get the missing results during the week.
Auction figures show the number of homes being passed in on vendor bids has doubled over the past year.
Vendor bidding is a practice in which estate agents make up bids on the house they are trying to sell in an attempt to make potential bidders think the property is worth more than they might believe.
Buyers advocate David Morrell, of Morrell and Koren, believes many vendors are chasing rainbows with outdated prices expectations.
"The market is more realistic, especially at the top end," he said.
"The only properties that are not being sold are those with vendors that have expectations that are greedy.
"The public generally are concerned that the market may have peaked or be on a slide backwards.
"There is more choice and, given that Christmas is only weeks away, there is more pressure on vendors to meet purchasers' expectations or end up owning a property until February."
Mr Morrell said buyers are lowering how much they are willing to pay for properties.
REIV spokesman Robert Larocca agrees the high number of properties being passed in on vendor bids shows expectations are ahead of the market.
He said vendors' expectations were most unrealistic in inner areas such as East Melbourne, Pascoe Vale, Brunswick East, Brighton, Thornbury and Elwood.
They were more realistic in Watsonia, Hillside, Bellfield, Viewbank and Windsor, where 90 per cent of homes continue to sell.
The slump comes as property groups renew calls for stamp duty cuts as the only way to ease the burden on new home buyers.
As the state election campaign hit the midway point, Liberal and Labor are under growing pressure to take some action, with claims cutting stamp duty on new homes would cost only $93 million.
The State Government is on track to pocket $3.8 billion this year from stamp duty.
The Housing Industry Association warned housing affordability in Victoria is close to its worst level in recent history as stamp duty is being levied three times on the building of a new home - sale of the land, developer and homebuyer.
HIA Victorian executive director Gil King says first homebuyers pay more stamp duty in Victoria than any other state and multiple charging needs to end.
"We also believe that stamp duty rates should be indexed to keep pace with changing property values and that for first home buyers buying properties below $500,000, stamp duty should be removed, or at least there should be major concessions on stamp duty," he said.
Read more: http://www.news.com.au/money/property/expect-the-worst-property-auctions-slump/story-e6frfmd0-1225952955621#ixzz158afKSVb
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