PHOTO: 13 Old Aqueduct Rd, Diamond Creek beat the odds with multiple developers bidding for the property in an auction that soared $1.725 million past reserve in December. Source: Supplied

Slow banks have joined a property market correction in footing the blame for a Melbourne auction wipe-out that slashed more than 20 per cent from the citywide clearance rate last year.

The nation’s auction capital has been particularly exposed to lengthening home loan approval timelines as lenders step up their due diligence on borrowers.

New CoreLogic figures show the city’s clearance rate fell from the 68.1 per cent recorded across the three months ending in December, 2017, to 45.8 per cent for the final three months of 2018.