Melbourne homeowners may take for granted the city’s continued house price growth, but some spots are not enjoying the same success – and they all have one thing in common.

Balwyn North, Mount Waverley, Glen Waverley and Doncaster recorded some of the biggest house price falls over the past year after a string of foreign buyer fee and tax hikes and tighter lending rules softened the markets.

The unit median also fell in the CBD, Box Hill and Footscray – perhaps a symptom of a large volume of new apartments hitting the market.

Balwyn North was once understood to be the strongest market driven by Chinese buyers – both investors and migrants – after recording 87 per cent house price growth over just three years.

But its house median recently took a big step back, with a 9.1 per cent fall to $1.7 million over the past year, Domain Group data shows. Mount Waverley recently clawed back ground but still saw a median slide over the past year of 5.1 per cent.

Overseas buyers had been less active in the market recently because of the recent rule changes,Marshall White auctioneer Robert Ding said, but while local Chinese buyers may pay more for properties they really liked in the face of increased competition.

“They’re not going to be paying exorbitant figures like they were last year – because they didn’t know the market”.

Significant and sustained periods of strong price growth in those markets had created affordability barriers, Domain Group chief economist Andrew Wilson said.

The city apartment market has also recorded weaker prices, in contrast to the wider unit market, which grew 5.5 per cent over the year.

The median price for one-bedroom units in the City of Melbourne fell 1.4 per cent over the past year. Two-bedroom unit prices fell 1.8 per cent over the year, while three bedrooms – about a tenth of the sales – grew 5.4 per cent.

Angie Zigomanis, of BIS Shrapnel, said the data showed the resale apartment market was more challenging, and there had been virtually no rental growth – and probably rent declines in established apartments.

But three-bedroom apartment prices performed better because there were fewer of them, he said.

“It’s been a soft market for the last couple of years; we haven’t really seen that much price growth and any rental growth,” Mr Zigomanis said.

Many big inner-city projects that sold off-the-plan a few years ago were now reaching completion, and would add a large amount of supply to the market and make it more competitive, he added.

Kate Raynor, a post-doctoral researcher at the University of Melbourne, said small inner-city apartments were predominantly developed with investors in mind.

“When you throw all of these resources into building a lot of high-density apartments in the CBD, aimed at investors and not the end-user and occupants, then you’re likely to create a situation where you’re not meeting the needs of the population,” she said.

Dr Raynor believed there should be more social and affordable housing, but also more medium-density in Melbourne’s middle suburbs.

There would be a demand for townhouses and medium-scale apartment blocks – five storeys as opposed to 15 storeys – with Melbourne’s ageing population and decreasing household sizes, she said.