The national property market is in free fall with new figures showing prices tumbling sharply in January led down by a 1.7 per cent drop in Melbourne and a 1.4 per cent fall in Sydney.

CoreLogic's closely watched measure of dwelling values showed every capital city in the country bar Canberra started the year going backwards with the rate of fall accelerating through the past three months.

House values have tumbled at the start of the year with Sydney values down by 1.4 per cent while in Melbourne they dropped by 1.7 per cent Credit:Rob Homer

The drop in Melbourne means the city's house values have fallen by 10.6 per cent over the past 12 months.

Unit values did a little better, down 1.3 per cent in January to be down by 3 per cent for the past year.