Australian property prices fell 4.8 percent in 2018, marking this biggest calendar-year drop since the Global Financial Crisis.

New figures released today by property analytics firm CoreLogic reveal the weakest housing market conditions since 2008 as quarter-on-quarter decline sin Sydney and Melbourne drag down the national average.

Four of the nation’s eight capital cities recorded a decline in dwelling values, with Sydney falling the hardest (down 8.9 percent) followed by Melbourne (down 7 percent), Perth (down 4.7 percent) and Darwin (down 1.5 percent).

The brightest light of 2018 was the regional acres of Tasmania, where property prices shot up by 9.9 percent over the last calendar year.

Sydney suffered the largest drop in prices, with the median falling 8.9 percent over 2018. (AAP)

In the capital of Hobart property prices continued to climb, capping off 12 months of growth with an 8.7 percent increase in house prices.

Brisbane (up 0.2 percent), Adelaide (up 1.3 percent) and Canberra (up 3.3 percent) all recorded modest increases.

CoreLogic’s head of research Tim Lawless said despite the heavy falls in Sydney and Melbourne, the tightening up of credit from the major banks was dragging down property values across the nation.

“Although Australia’s two largest cities are the primary drivers for the weaker national reading, most regions around the country have reacted to tighter credit conditions by recording weaker housing market results relative to 2017,” said Mr Lawless.

Despite recording a near 10 percent fall, Sydney remains the most expensive city in the country with a median dwelling value of $808,494 – which factors in both free-standing homes and apartments.

In second place is Melbourne, where the median value of a dwelling now sits at $645,123, followed by Canberra with $601,275 and then Brisbane, where the average property will set you back $493,568.

The cheapest capital city in Australia to buy a property is now Darwin, where the median value has fallen to $416,149.

Tightening credit conditions means investors have found it harder to access finance to buy property. (AAP)

Looking ahead to the next twelve months Mr Lawless said he expected property prices to continue to fall over 2019 as many of the major cities become a buyer’s market.

“With a federal election likely to be held sometime in May, we may see a further negative impact on confidence, especially amongst investors who will be impacted by changes to taxation policy should there be a change of government,” Mr Lawless said.

“On a positive note, interest rates are set to remain close to historic lows and migration is likely to remain high (albeit lower than last year) which will help to keep a floor under housing demand.

“With stock levels remaining elevated, buyers will be in the driver’s seat when it comes to choosing a property and negotiating on price.

“Conversely, vendors will need to be cognisant of market conditions and set their price expectations and marketing strategies accordingly.”

Australian Dwelling Values of 2018

Capital city: Annual change: Median value*: Sydney - 8.9 percent $808,494 Melbourne - 7.0 percent $645,123 Brisbane + 0.2 percent $493,568 Adelaide + 1.3 percent $434,924 Perth - 4.7 percent $446,011 Hobart + 8.7 percent $457,523 Darwin - 1.5 percent $416,149 Canberra + 3.3 percent $601,275 National - 4.8 percent $532,327



*Includes both units and houses. Index results as at December 31, 2018. CoreLogic