Residential property prices fell 0.7 per cent in the June quarter 2018, according to figures released this week by the Australian Bureau of Statistics (ABS).
ABS Chief Economist Bruce Hockman said that Australia's two largest cities continued to lead the fall.
"Sydney recorded the fourth consecutive quarter of falling property prices (down 1.2 per cent), while Melbourne property prices fell 0.8 per cent, the second quarter of price falls for the city.
"The initial slowdown in these markets was spurred by regulatory changes and a tightening in the supply of credit to investors, while a drop in investor demand over recent months appears to be adding to the slowing in housing credit growth”, Hockman said, adding that the effect of this is more pronounced in the larger property markets of Sydney and Melbourne.
Darwin (down 9 per cent) and Perth (1 per cent) were the only other capitals to record falls. Hobart recorded the highest rise in prices (up 3.0 per cent), followed by Brisbane (0.7 per cent), Canberra (0.6 per cent) and Adelaide (0.3 per cent).
Through the year, growth in residential property prices fell 0.6 per cent, the first annual fall since the June quarter 2012. With the exception of Hobart (up 15.5 per cent), most capital cities have continued to record a moderation in annual growth rates since the September quarter 2017.
Annually, property prices fell 3.9 per cent in Sydney, the largest price fall since the March quarter 2009, while annual growth in Melbourne (up 2.3 per cent) continued to slow.
The total value of Australia's 10 million residential dwellings decreased $13.3 billion to $6.9 trillion. The mean price of dwellings in Australia is now $686,200.