Listings are down in some areas in Sydney, making it more difficult to buy a home now than a year ago. According to Domain Group data, the northern beaches have it the toughest with listings plummeting 30.8 per cent over the year to June. There were also 15.4 per cent fewer apartments for sale. Sharp declines in homes for sale can also be seen in the lower north, northwest, and upper north shore.

"Demand was brought forward as vendors looked to make the most of the price growth (during the boom), said Domain Group chief economist Andrew Wilson. According to him, this could partly be a hangover of Sydney's four-year property boom that had sellers rushing into the market.

While this could help strengthen the markets, it can increase consumer anxiety especially for buyers who have been looking for new homes for months. Consumer anxiety increased in NSW over the past quarter due to concerns about job security and medical expenses, NAB's latest Consumer Anxiety Index shows. This has kept auction clearance rates high, with buyers paying above value to get into the property market.

"There's continued competitive bidding at auction. Last year it slowed, with fewer attendees, but we're back to 10 to 12 registered bidders and four to six active bidders at every auction," said Property Buyer managing director Rich Harvey.

However, record levels of new home building buoyed apartment listings in many areas across Sydney. There are now 30.5 per cent more units in the north west and 24.3 per cent more units in the city and east.

"Inner suburban, higher-priced houses are still slim on the ground, but the question for apartments is whether we’re going to flood the market," Wilson said.