Latest property figures show house and unit prices fell more sharply across Newcastle than in Sydney and Melbourne last month.
CoreLogic data for October shows the median house price in Newcastle and Lake Macquarie dropped 1.1 per cent to $571,000, more than the 0.7 per cent monthly fall in the two big capitals.
Newcastle prices have dipped 2.3 per cent in three months, more than in Sydney (2.0), Melbourne (2.1) and nationally (1.4).
The median unit price fell 1.3 per cent to $467,000 and 2.5 per cent for the quarter.
The Newcastle market was weaker in October than in every state capital. Brisbane, Darwin and Canberra prices stayed level, Adelaide dropped 0.2 per cent, Perth fell 0.8 per cent and Hobart rose 0.9 per cent.
But Newcastle still has a long way to go to catch up with Sydney’s 7.4 per cent slide over the past year and Melbourne’s 4.7 per cent fall.
The rest of the Hunter has been the best performer in NSW outside Sydney and the seventh best regional performer in the country over the past year, rising 5.1 per cent. But the October data shows it, too, has started to slow, falling 0.2 per cent overall across houses (0 per cent) and units (-1.6).
Newcastle real estate agent Scott Walkom said buyer confidence had started to weaken and buyers were finding it harder to gain finance approval.
“It’s definitely not as heated. A lot less inquiry. I don’t think there’s any fear of missing out at the moment,” he said. “Prices are falling because buyers are uncertain and there’s a lot of media about prices coming down.”
“The vendors that aren’t adjusting [prices], it’s harder to get the buyers at that level that they were even three months ago.”
The Newcastle Herald reported last month that Newcastle property prices had fallen 1.9 per cent in the September quarter, the first significant drop since 2011.
CoreLogic’s new monthly report shows the highest-value quarter of the market has fallen 6.6 per cent nationally while cheaper houses have risen 0.5 per cent.
Mr Walkom said that phenomenon was playing out in the Newcastle market.
“At the bottom end, first home buyer level, prices are still holding up,” he said. “The middle is sort of OK, but the top end is a lot weaker because, I suppose, 10 per cent off is a couple of hundred grand, which is a fair bit.”
The recent drop in Newcastle house values is minor compared with a 50 per cent jump over the past five years.
CoreLogic said prices could continue to fall over summer, but low unemployment and a “skew towards full-time job creation” suggested the national market would not drop substantially.