House prices across the nation dropped by 4% in May, making it the smallest month-on-month decline since May 2018, according to CoreLogic.

Dwelling values continued to track downwards across the regions, at a broad level, with a slower pace of drops.

 “This improvement is primarily being driven by a slower rate of decline in Sydney and Melbourne, where housing values were previously falling at the fastest rate of any capital city. Sydney values were 0.5% lower over the month while Melbourne values were 0.3% lower – the smallest decline in values across both cities since March last year,” CoreLogic Head of Research Tim Lawless said. “In other cities, where housing market conditions have generally been more resilient to a downturn, the trend is opposite.”

Hobart prices have declined for two months and counting, which caused the quarterly rate of change to reach the negative territory for the first time since early 2016. Canberra values, meanwhile, slid by 0.2% over the months — and the rate of growth remains only slightly in positive territory (+0.2%).

CoreLogic found that Adelaide (+0.2%) was the only city that did not record a decrease in housing values over the month. South Australia, Tasmania, and Northern Territory were the only regions to post an increase in May among the remaining states. Finally, regional Tasmania is the only broad region across the country where housing values remain at record highs.

The higher auction clearance rates through the month echoed the slower rate of decline.  Sydney clearance rates broke the 60% mark for the first time in a year during the last week of May. Melbourne clearance rates, on the other hand, have held around 60% over three of the past six weeks.

 “Although clearance rates remain low relative to several years ago when housing market conditions were much stronger, the improved performance at auction aligns with the easing rate of decline,” Lawless said.

Dwelling values across the country have dropped by 8.2% since peaking in October 2017. Values across the combined capitals index slid by 10.1%, while regional values fell by 3% since peaking. Larger capital city falls have been logged in Darwin (-29.5%) and Perth (-19.2%), as well as regional WA (-32.5%) where the mining downturn has resulted in weak economic and demographic conditions.

“These regions now represent some of the most affordable housing markets around the country, a factor which explains the high proportion of first home buyer participation in these areas. The last time values were this low in Darwin was March 2017. In Perth, values were previously this low in April 2006 and values haven’t been this low across regional WA since July 2005,” CoreLogic said.