Nationally, home values dropped 0.1 per cent during December, enough to bring the quarterly result down 0.1 per cent as well, CoreLogic’s latest data says.

CoreLogic research director Tim Lawless said the decline in values was no surprise.

“This result represents the housing market catching up with the reality of market dynamics,” he said.

“Growth in housing values has been consistently weakening through the second half of the year, as affordability constraints weighed on buyer demand and advertised supply levels trended higher.”

The decline came after home values overall increased 4.1 per cent in the first half of 2024.

And despite the last quarter’s results, Australian home values rose 4.9 per cent last year overall, or by about a median of $38,000.

Three capital cities recorded a fall in values over the year, including Melbourne (three per cent), Hobart (0.6 per cent) and Canberra (0.4 per cent).

Despite falling 0.6 per cent in December and by 1.4 per cent in the final quarter, Sydney home values increased by 2.3 per cent through the year, to an average of $1.19 million.

The mid-sized capitals, however, surged, with Perth home prices up 19.1 per cent, followed by Adelaide (13.1 per cent) and Brisbane (11.2 per cent).

However, CoreLogic’s data indicated the peak rate of growth was in the past for those cities, with gains slowing.

“Extremely low advertised stock levels have continued to support strong growth conditions across Adelaide, with stock levels tracking 34 per cent below the previous five-year average in mid-December,” Lawless said.

“Perth, on the other hand, has seen a clear lift in advertised supply, which has provided buyers with more choice and less urgency, supporting a sharper slowdown in value growth relative to Adelaide.”

And in a blow to those looking to enter the market, it’s the most affordable homes that are seeing the steepest increase in value overall, with the lower-priced quartile of the market rising 9.8 per cent, compared to a 1.5 per cent increase for the upper.

“With worsening affordability constraints and reduced borrowing capacity, we have seen buyer demand pushed towards lower priced markets, which has, in turn, supported stronger growth conditions in these areas,” Lawless said.