There wasn't even a bid at two recent home auctions that I know of even though clearance rates are supposed to be high. Dump or not, that's not like any property boom I can remember.

Not that clearance rates tell you all that much; when vendors are being more realistic to use agentspeak  – read prepared to compromise – clearance rates are bound to be impressive.

Mind you, it was different six months ago when the heat was on and buyers were being, er, unrealistic.

The annual growth in home values in October was 13.1 per cent in Sydney and 8.9 per cent in Melbourne, according to RP Data.

What am I saying, isn't that pretty strong? Oh wait, six months ago it was 17.3 per cent for Sydney and 14.6 per cent for Melbourne.

Everywhere else prices fell last month, except in Brisbane where they were virtually stagnant.

So the property market is slowly losing steam. Without a pick up in the economy, which is to say unless the dollar drops further, it might sputter out altogether.

It'd be a mistake to think property has a life of its own. Home prices have risen an average 6.3 per cent in Melbourne and 3.9 per cent in Sydney over the past 10 years. They should rise by nominal GDP, a shorthand measure of national income including inflation and population growth, in which case Melbourne was smack on average. Sydney under-performed and has just been catching up.

You know how real estate agents are always saying there's not enough stock on the market? Turns out they're telling the truth.

A paper by the Reserve Bank says housing turnover in Sydney and Melbourne is unusually low because home owners are loath to borrow more and trade up.

I don't blame them. "The share of current income required to service an average loan over the next 10 years is close to historical highs," the Reserve says.

It's not likely to improve either. "Nominal labour income has grown at an average annual rate of 2.7 per cent over the past two years, compared with a decade average of 6.2 per cent. And the widespread expectation is that wage growth will remain subdued for a time," it says.

So while mortgage rates are at an all time low, high property prices and falling real incomes are beginning to bite.

In fact the Reserve points out that "an increasing share of owner occupiers is opting for interest – only loans to increase repayment flexibility."

It's just as well it's been keeping that to itself because they'll be struggling once rates start rising and they won't have paid off any of the mortgage.

At least it had the decency not to mention its own forecast of rising unemployment.

Yet economists are predicting rates will rise sometime next year, a view not shared by the smart money. Bond yields have been falling and interest rate futures contracts don't anticipate a rate rise until March 2016.

In any case the Reserve's growth and employment forecast are for a deterioration this financial year and a modest improvement in the second half of the next one, hardly suggesting a screaming need to lift rates. Especially when it wants the dollar to drop.

Anyway worse than a rate rise would be falling real wages and rising unemployment, and we have both.

The floor, so to speak, under home prices is a housing shortage especially in Sydney and the rising costs of building.

Even then there's a home building boom under way that, combined with lower immigration, will close the gap.

Housing inflation, as the Reserve calls it, is rising faster than everything else.

"The price of a newly built dwelling has risen by nearly 4 per cent over the past year – faster than its historical average and around the quickest pace in nearly five years, a period over which conditions in this market had generally been subdued," it says.

Wages have been especially subdued in construction so how could costs be rising? Builders are increasing their margins, that's how.

For the first time investors are borrowing more than owner occupiers which hasn't gone unnoticed by the Reserve. But even it admits that more investor purchases means more places are available to let which means lower rents.

And you guessed it. Lower rent growth will give investors pause for thought, another reason for more subdued buying.

 @moneypotts