The national median house price fell at the fastest rate in six years over the three months to September, new figures show.
Prices in Sydney fell the quickest of all the capital cities, with the exception of the volatile Darwin market, dipping 1.9 per cent to $1.2 million over the September quarter, according to the Domain State of the Market Report released on Thursday.
Melbourne Canberra and Hobart were the only cities where prices rose over the quarter, while the national median house price dipped by half a percentage point to $819,455.
The national decline was the first quarterly fall recorded since December 2015 and the steepest drop since the same time in 2011.
Domain chief economist Andrew Wilson said the incentive of low interest rates over recent years has dissipated.
"Actions by policymakers to restrict residential investor activity through tighter lending conditions to that group have also acted to weaken prices growth over the last three months," he said.
For investors, Hobart continues to provide the best rental yields for houses with average returns of 5.29 per cent recorded in the September quarter, with Sydney and Melbourne delivering the worst yields.
Overall residential property prices in Hobart have soared by 14.8 per cent over the year but the city remains Australia's most affordable.
Unit prices slumped in Sydney, Brisbane, Perth, and Darwin, while Canberra was the leader for unit rental yields.
Property prices softened in many parts of regional NSW, with the exceptions of Shoalhaven, Ballina, Port Macquarie and Coffs Harbour.
Prices in regional Victoria were mixed; border town Wodonga was a stand out with eight per cent quarterly growth but Ballarat suffered a 4.6 per cent drop.
Values stagnated in regional Queensland, with prices flat in Bundaberg and Cairns, dipping 1.7 per cent on the Gold Coast and plummeting 9.5 per cent in Mackay.
- Median house price down 1.9 per cent to $1.2 million
- Median unit price down 0.8 per cent to $732,321
- Sydney prices have doubled over the last five years but affordability is now slowing demand and moderating price increases.
- Biggest rise - Ballina up 7.1 per cent to $621,250.
- Biggest fall - Great Lakes down 4.6 per cent to $492,500
- Median house price up 1.3 per cent to $880,902
- Median unit price up 3.4 per cent to $506,334
- Median unit price growth suggests recent record levels of new apartment development have had a negligible impact on price, with demand continuing to absorb higher levels of supply.
- Biggest rise - Wodonga up eight per cent to $342,500
- Biggest fall - Ballarat down 4.6 per cent to $325,000
- Median house price down 0.2 per cent to $551,840
- Median unit price down 3.5 per cent to $376,685
- Brisbane's median unit price is at its lowest level in three years and values are tipped to drop further.
- Biggest rise - Gympie up five per cent to $314,000
- Biggest fall - Mackay down 9.5 per cent to $308,750
- Median house price down 0.3 per cent to $519,517
- Median unit price up 1.6 per cent to $313,074
- Median house price down 1.3 per cent to $554,095
- Median unite price down down 6.7 per cent to $351,875.
- Median house price up 4.3 per cent to $723,980
- Median unit price up 1.9 per cent to $427,391
- Median house price up 4.4 per cent to $409,592
- Median unit price up 6.3 per cent to $323,174
- Median house price down 3.6 per cent to $593,329
- Median unit price down 6.8 per cent to $330,354