Home prices fell 0.29% in Sydney and 0.27% in Melbourne, demonstrating the emerging two-speed housing market, according to REA's PropTrack Home Price Index May 2022.

Prices were down in the ACT for the first time in three years, and regional WA and Queensland recorded falls of 0.43% and 0.19% respectively.

Exceptions to this trend were Brisbane and Adelaide, where property prices rose 0.35% and 0.58% respectively.

"Affordable, lifestyle regions of Brisbane, Adelaide, regional NSW and Tasmania continue to see solid growth, with flat or falling prices elsewhere," the report read.

Housing market activity was disrupted by the federal election in May, but price growth has been slowing for some time according to REA.

Price growth has slowed considerably in 2022, and is now falling nationally- annual price growth was 24% six months ago, but now stands at 14%.

REA's report said conditions have shifted rapidly from 2021, with expectations of sharply higher interest rates this year weighing on affordability.

Moving forward, the report said the biggest unknowns for the housing market are interest rate hikes and wage growth.

Adelaide and Brisbane's strong performances

Brisbane's housing market is currently the strongest in the country at 26% over the past year and looks set to continue to see strong growth according to the report.

Adelaide is also seeing strong growth - prices have increased 24% over the past year.

While ranking as the second strongest performer, the report said Adelaide has the most momentum of any city market.

Regional areas that saw growth over the past month included Tasmania (0.47%), NSW (0.24%), SA (0.34%), and NT (0.20%). 

Overall, regional areas saw growth of 0.01% in May.

Capital city housing markets saw a drop of -0.15%, due to falling prices in half of the capitals. 

Sydney home prices fall for second consecutive month

With the drops in property prices over the past two months, Sydney's annual price growth is now at the slowest rate since January 2021 at 10.21%.

This may be partly due to stretched affordability according to the report, with the median house price in Sydney currently sitting at approximately $1.25 million.

Melbourne's home prices also fell, which shows the continuing moderation of its housing market.

Price growth has slowed considerably since mid-2021, now up 7.5% annually - the slowest capital city market.

Melbourne's median house price is now estimated at just over $900,000.

A year ago Propertyology's head of research Simon Pressley said Melbourne's property market was fragile and a smokescreen.

Price growth in ACT has also slowed rapidly this month, following a flat result last month.

Stretched affordability may also be weighing on ACT price growth according to the report.

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.06% p.a.
$3,011
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$2,995
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$250
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5.69% p.a.
6.16% p.a.
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

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