Sydney's housing prices are falling down, falling down, falling down, page-32

Yep that is possible too.

As is;
Vendors taking properties off the market if desired price is not reached, leading to reduced stock levels thereby moderating buyer/seller advantage. This is called a normal market.

This is what has happened to 2 houses near me recently, they were hoping for a silly price that they may have got during the heights of the boom, but was never realistic in the current market. They didn't get it, but that didn't mean they took what ever they could get. Just took down the sign.

As I pointed out, Sydney economy is very strong so there is very little stress selling.
Unless this changes, don't expect a repeat of what you have been experiencing in Perth.