A 1920s knockdown cottage on a 727-square metre Wollongong block, listed with $4 million expectations given its water views of Belmore Basin, has been sold for a whopping $5 million.

It was bought by the Illawarra colliery owner Arun Kumar Jagatramka, whose company Gujarat NRE expanded its operations from India to the South Coast in 2004.

However, for most NSW vendors the spring property market may be a test of patience.

Well-priced properties have been selling, but cautious buyers can usually afford to take more time to make their offers and their decisions.

Auction and private treaty turnover has weakened but commentators report Sydney prices have been much more resilient compared with price declines recorded in the US and Britain.

"While the peak in housing interest rates was far higher in Australia, there was no evidence of any widespread stress," said a BIS Shrapnel analyst, Jason Anderson.

He said a recovery in property prices should occur next year, with the main risk being increasing unemployment.

"The incidence of foreclosures across Sydney suburbs is likely to broaden out, rather than being concentrated in the western suburbs," Mr Anderson said.

Gareth Woodham, a valuer, said spring might be a good time to buy a house in Sydney.

But he said people should buy "only if you have a fair bit of your own capital involved and can survive a slim chance of further falls in coming months".

Buyers need 10 to 15 per cent more equity to secure a loan compared with this time last year, Leanne Pilkington, the chief of Laing & Simmons Real Estate, said.

"There is no denying that the market has been difficult over the past year. The rising cost of debt and tightened lending policies from banks mean the market will remain fairly flat in the immediate term, while continuing to turn over," she said.

Last Saturday vendors found buyers for 46 per cent of the 226 listings, well down on the same Saturday last year when the clearance rate was 66 per cent.