Sydney's residential property market is showing clear signs of stress, with auction clearance rates falling to their lowest levels in more than five years.

The deterioration in sentiment was highlighted by a prominent sale in Eastwood, where a six-bedroom family home traded for $4.355 million at auction last weekend.

7 million just ten months earlier, representing a loss of $345,000 for the vendor.

The property had sold for $4.7 million just ten months earlier, representing a loss of $345,000 for the vendor.

This individual outcome reflects a broader trend of weakening demand and increasing nervousness among sellers across the city.

The slump in clearance rates is not isolated to Sydney; Melbourne has experienced a similar decline, marking a significant shift in the national housing landscape.

The primary driver appears to be a sharp decrease in buyer confidence, compounded by rising interest rates and economic uncertainty.