Experts warn Aussie home prices may crumble

Sydney

AFTER a long pause, the auctioneer commissioned to sell a northern Sydney beach-side apartment for in excess of A$800,000 (S$864,000) put his gavel away, unable to entice a single bid.

Across town, in the city's trendy inner western suburbs, the owner of a warehouse converted into a three-level home dropped his reserve price for the property's sale. There were only two potential buyers at the auction, and they had declined to enter the kind of bidding war that had caused home prices in Australia's two biggest cities, Sydney and Melbourne, to double since 2008.

The auction stand-offs may indicate that the Sydney market, which has been defined by researcher Demographia as the second most unaffordable in the world after Hong Kong, has finally hit a peak. As the buyers have drifted off, the sellers ha…