Home values dipped in May for the first time in six months, even in Sydney, but the reprieve for buyers is unlikely to last.
Median values across all the capital cities dropped 0.9 per cent in the month, with falls recorded everywhere except Darwin and Canberra, the latest CoreLogic RP Data home value index shows.
Its measure of Sydney home values fell 0.7 per cent in May, Melbourne's dropped 1.7 per cent, and Hobart took the sharpest fall, with values down 2.7 per cent.
The figures, which are based on the value of all homes whether they are on the market or not, came as Treasury boss John Fraser warned of a housing bubble in Sydney and parts of Melbourne.
While CoreLogic RP Data's value index fell for most capital cities, sale prices in Sydney and Melbourne continued to rise in May, taking median prices in Sydney past $750,000.
CoreLogic RP Data's head of research Tim Lawless said the falls in value were a natural correction after months of strong growth, but are not expected to last.
Record low interest rates and a well-received federal budget are likely to continue to drive buyer interest, he said.
"Other market indicators are also pointing to stronger conditions for the Sydney and Melbourne housing markets, with auction clearance rates remaining at or close to record highs throughout May, along with low advertised stock levels across the largest cities, particularly for Sydney," Mr Lawless said.
Even with May's value dip, Sydney's booming property market added 15 per cent in the past 12 months, while Melbourne homes are nine per cent higher.
Conditions on all other capital cities are far more subdued, and values in Darwin and Hobart have fallen two per cent and one per cent respectively in that period.
MEDIAN HOME VALUES IN MAY, AND MEDIAN SALE PRICES
* Hobart, down 2.7pct, $328,000
* Melbourne, down 1.7pct, $569,500
* Brisbane, down 0.8pct, $463,000
* Sydney, down 0.7pct, $752,000
* Perth, down 0.5pct, $510,000
* Adelaide, down 0.2pct, $400,000
* Darwin, up 0.6pct, $520,000
* Canberra, up 1.4pct, $549,000
Source: RP Data
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