Interest rate cuts and the increase to the first-home buyers grant appear to have failed to restore confidence to the property market with auction clearance rates dropping sharply over the month.

The slide was most pronounced in Melbourne, which recorded its worst monthly clearance rate since January 2006. The November clearance rate in Melbourne was down five percentage points on the previous month, and was 22 points lower than the figure recorded for November last year.

Australian Property Monitors senior economist Liam O'Hara said the market remained "lacklustre".

The Australian