Australia's two largest housing markets tipped into negative territory over the month to date, with Sydney values down 1.3 per cent and Melbourne falling 1.8 per cent, CoreLogic figures show.
The falls in the data provider's home value index for the first 29 days of May likely reflected a continuing decline in apartment values, which lost ground in both cities in April, Corelogic head of research Tim Lawless said.
While CoreLogic figures typically show a downturn in May, the weaker performance was a consequence of tighter credit rules after banking regulator APRA in March strengthened its policies on lending to investors and worsening housing market sentiment as seen in this month's Westpac Melbourne Institute report, Mr Lawless said.
"The trend we've been seeing... shows apartment values are weaker than house values," he told The Australian Financial Review on Tuesday. "We haven't seen weaker performance in the attached housing market. We haven't seen any evidence of anything that would possibly change that over the past month."
CoreLogic will release a full breakdown of the monthly figures - which reflect a 1.1 per cent decline across the five largest capital cities - on Thursday.
While the figures back the notion of slowdown in the housing market, the signals are mixed. Investor lending rose in March for the first time in more than a year, official figures earlier this month showed and asking price figures from consultancy SQM Research paint the picture of a market that is still strong.
Meanwhile, separate figures on Monday from CoreLogic and credit bureau Equifax showed prices rising faster than loans in Sydney and Melbourne were pushing banks' loan-to-value (LVR) ratios lower, in a sign of growing caution by lenders.
While Mr Lawless pointed to other signs that the market was losing momentum, such as easing auction clearance rates, higher borrowing costs for investors and rising number of listings, Mr Lawless repeated the cautious tone he made when reporting April's price figures.
"We need to see a few more months before we can confirm a downward trend that is becoming evident," he said.
Last month CoreLogic figures showed price growth in Sydney and Melbourne slowed in April mainly due to falls in apartment prices. Sydney values level-pegged last month, with houses gaining 0.2 per cent and apartment values falling 1.2 per cent, month on month. Houses in Melbourne gained 0.9 per cent while units shed 0.9 per cent, for an overall monthly value gain in the city of 0.5 per cent.
Price growth was at least likely to keep slowing, he said.
"Is decelerating? All evidence is it probably is decelerating. Over next few months we should see some evidence to see if the deceleration is gathering pace."
Perth's beleagured market may be stabilising. The month-to-date 0.6 per cent decline in property values was better than the 1 per cent decline seen in the WA capital in April.
"Perth is still moving through a correction," Mr Lawless said. "It's probably losing a little downwards momentum."
Brisbane values were up 0.8 per cent so far in May and Adelaide values up 0.5 per cent, he said.
