Sydney asking prices of units and houses fell while listings rose more than usual in May, according to SQM Research, with the data adding weight to the notion that the NSW capital's housing market is slowing.

The 1.1 per cent fall in asking prices of houses and the 1 per cent decline for unit prices came as listings rose 5.9 per cent from April, more than the typical 3 per cent increase seen after the quieter month of Easter and Anzac Day holidays, SQM said.

Asking prices often differ from what vendors receive, but they are a good indicator of the strength of the market. It was the first time in more than a year that asking prices of both units and houses fell in the same four-weekly period.

Auction clearance rates fell below 50 per cent in Sydney's outer suburbs Rob Homer

The SQM figures follow separate ones from data provider CoreLogic showing Sydney house prices fell 1.3 per cent in May and Melbourne's prices dropped 1.7 per cent, and suggest the market may be slowing in Australia's largest city.

"While it is still too early to call a slowdown in Sydney at this stage, we are watching this market closely as there has been increasing evidence of a possible slowdown," SQM managing director Louis Christopher said.