Vendors risk longer sale times and a drop in house prices as Sydney's real estate market prepares for "all hell to break loose" later this year, an industry expert has warned. Australian Property Monitors research director Louis Christopher expected the recent interest rate rise to affect the market as early as this weekend. Sydney real-estate agents and auctioneers braced themselves for tougher buyers, who are expected to use the rate rise - and the one expected in several months - to negotiate better prices, while vendors offload their properties as soon as possible. The Reserve Bank of Australia has lifted interest rates twice this year, resulting in the highest mortgage rates in five years. More than 200 properties are scheduled to go under the hammer across Sydney this weekend. "More than likely there will be more withdrawals and there is a chance that we might have a higher auction clearance rate this weekend," Mr Christopher said. "What if, for example, we saw vendors reduce their reserves this weekend to get the sale, to get the property off their hands before all hell breaks loose?" About 10 to 12 per cent of properties are withdrawn from auctions in Sydney each weekend. Mr Christopher said in a good market that figure was as low as 5 per cent, while in tougher times up to 20 per cent of vendors withdrew their homes from auction on the day. He said the full effect of the interest rate rise would not be felt until the medium term, when more stock came onto the market in spring. "We think the interest rate rise and the May one will be a dampener on the marketplace and we expect the September and December quarters will record some type of decline," he said. "Vendors will be aware of that too, as we've been saying all week that interest rate rises and property prices don't mix." In the inner west, Elders Enfield auctioneer and agent Sebastian Bonaccorso said there were plenty of buyer inquiries about his agency's five auctions on Saturday 5 August. Although he expected buyers to continue to make offers on properties, it was the vendors who were more nervous. "Most buyers in the marketplace still want to buy - I think the interest rate rise might affect a few people down the track," he said. "A lot of vendors are saying maybe they should have taken an offer they had a couple of weeks ago. They have got a lot more realistic." Cooley Auction Services director Damien Cooley, who presided over six auctions that day, said buyers would see the interest rate rise as an opportunity to prolong their decisions. "Buyers will see this as a bargaining tool as there's not as much pressure on them to bid and buy," he said. "People are resigned to the fact that the market is going to experience a similar growth as the past two years, which is not much." Source: SMH