Sydney and Melbourne were the worst performing real estate markets in the country last year with house prices falls of 10 per cent and 9 per cent respectively, but economists warn there are more declines to come.

The two largest capital cities in the country have dragged down national dwelling values 4.8 per cent over the year in the worst national result since the December quarter of 2008, data from housing research firm CoreLogic shows.

Sydney’s dwelling prices have fallen back to the same level in August 2016, before the peak of the real estate boom, while Melbourne’s prices are now at February 2017 levels.

Some commentators, such as AMP Capital chief economist Shane Oliver, have warned further falls of up to 10 per cent in property prices are expected in 2019.