The clearance rate dropped to 63% - down 4 percentage points on the pre-Easter weekend - another in a series of falls that means none but the foolhardy are still expecting a return to the boom conditions of last year. The Real Estate Institute of Victoria is laying the blame at the feet of the Reserve Bank and private financial institutions, with enough time to have now passed for the market to be feeling the full effect of the recent cycle of interest rate rises - the most recent just this week. "We're now seeing a clear lessening in demand for residential property, which is appearing in reduced clearance rates and lower levels of competition," said Enzo Raimondo, chief executive of the REIV. "Clearance rates are likely to hover in the 60% range for quite a few months yet, but that's on the basis that nothing further exacerbates the market, like even more interest rate hikes." But the drop doesn't mean the market is in a tailspin, with some property analysts saying that clearance levels still indicate a "fairly stable" market. "While buyers aren't fighting each other, neither does it mean there isn't genuine interest or good strong sales to be made," said Angie Zigomanis, a property analyst with BIS Shrapnel. "There has been a noticeable swing in favour of buyers compared with last year." This was demonstrated by four apartment auctions in Toorak, Richmond and St Kilda West, observed by Paul Nugent of Wakelin Property Advisory - all of which sold under the hammer but none returning the stellar results that might have been seen previously. "There were multiple bidders but the buying was around the lower end of expectations," Mr Nugent said. "People want to buy but they are being very conservative in the level that they are prepared to go to." In Kensington, the auction of a two-bedroom townhouse went from a potential washout to a blow-out, with the vendors getting $33,000 above their reserve, despite some bad timing. If the torrential rain wasn't bad enough, a lost bus driver pulled over in the middle of the auction to ask directions. Lou Rendina Real Estate sold 4/130 Kensington Road for $466,000, thanks to the willingness of five bidders to stick it out. There were no celebrations for Hawthorn footballer Trent Croad, whose Surrey Hills property passed in on a vendor bid that was $79,500 less than the reserve. The three-bedroom contemporary house at 1/7 New Street attracted just a single bid before passing in at $870,000. Collins Simms agent Chris Barrett is confident the property will sell privately despite the lacklustre auction result. The dismal day also dampened enthusiasm for the land release at The Castlemaine development in Eynesbury, with just eight of 25 allotments selling yesterday. The prices ranged from $119,000 to $240,000 for 800 to 1000-square-metre blocks, with a sell-out recorded for all of the allotments adjoining the Graham Marsh-designed golf course. There is now a clear run of auction weekends until Anzac Day in late April, with more than 2800 properties scheduled to be offered in the next four weeks. Whether the market will be able to absorb that kind of stock is yet to be seen. Source From SMH