The numbers have added to concern about a shortage of properties - for renters and buyers - which is expected to put further pressure on house prices and soaring rents.

But the property market in Sydney remains flat, with buyers staying away in the wake of this year's two interest rate rises and amid general gloom and doom.

Estate agents polled by Domain found that people attending inspection open days in some areas had dropped between 15 and 50 per cent compared with last year.

The number of people taking out home loans had also fallen.

Figures released this week show home loan approvals down 5.9 per cent in February. Auction clearance rates are also well down on last year.

"Buyer numbers have dropped by about 20 per cent across most of our markets and we're seeing prices come off around 10 per cent," said Bresic Whitney co-principal Shannan Whitney.

Figures from the Bureau of Statistics indicate that amid a national shortage of housing, NSW appears the worst hit.

Fewer than one in five of the homes built nationally were built in NSW, despite the state needing to accommodate roughly one-third of the nation's population.

Nationally, 151,631 homes were built last year, the figures show. This is significantly less than estimates by economists of the need, which put the underlying demand for new homes at about 175,000 a year.

Of these, NSW built 28,799 homes, beating a previous record low set in 1987 of 28,829 homes.

A Macquarie Bank economist, Brian Redican, said flat or falling prices for established homes in NSW in the wake of the housing market bust had made the decision to build a new home less attractive.

Jim Fleming, an agent at Kelly & Sons in Newtown, said numbers at inspections had dropped by "at least half", especially young couples.

Debbie Donnelley, the principal of goodyerDonnelley, said new listings and buyer numbers in the east were "well down".

On the lower North Shore, a Ray White Neutral Bay Mosman agent, Kingsley Yates, said buyers were "gun shy". Numbers at inspections were down 20 per cent and vendors were holding off listing, perceiving they would not get their prices.

As mortgage stress widens and forced sales in some areas become more common, the general manager of Australian Property Monitors, Michael McNamara, is not surprised there is more caution.

"Over the last six months we've seen mortgage rates increase by about 1.25 per cent," he said. "What that does is undermine buyer confidence."

Although some agents complain of shortages of listings, Mr McNamara said the number of NSW properties for sale was 80,629 in February, compared with 62,520 a year earlier.

"If there are less buyers in the market, that means we're experiencing a bottleneck. Inevitably that will mean softer prices."

Australian Property Monitors data shows Sydney's median house price grew 5 per cent last year.