The number of average active bidders per auction has plunged below two, a level lower than for most of the past four years, according to Ray White figures. The number of potential buyers at open homes has also fallen to about two on average, compared with three to four in previous stronger markets. The decline in buyer activity comes as conditions have swung to a buyer's market, with falling prices and high interest rates.

Buyer's advocate and Property Investment Professionals of Australia chair Cate Bakos said buyers were "so scaredy-cat" and were sitting back despite having better conditions to buy at a discount. "They sit back and wait, and they moan when it turns into a seller's market," she said. Ray White chief economist Nerida Conisbee said the low numbers reflected much slower market conditions and far less buyer activity, and that people were not turning up to open homes because they felt "very uncertain" and feared prices would continue to fall.

On Tuesday, NAB downgraded its forecasts and now expects dwelling prices to decline 5 per cent across Australia's capital cities this year, more than double its earlier forecast of 2 per cent, including peak-to-trough declines of around 10 per cent in Melbourne and Sydney, the bank said in a note. Auction clearance rates have spent weeks largely below the 60 per cent level that is considered a balanced market between buyers and sellers.

Bakos said on the ground she had often been buying properties after auction that had passed in with no competition, or competing against one other party. Some potential buyers were adopting a "wait-and-see-what-happens approach", she said. Conisbee noted that when prices start to recover, that is when everyone piles in, but that people do not typically like buying in a down market.