Home prices 'fully in decline' with biggest national fall since 2022

National dwelling values have posted their biggest monthly fall since 2022. (ABC News: John Gunn)

Australia's housing market weakened further in June, with national home values falling 0.4 per cent, the biggest monthly decline since December 2022.

Sydney and Melbourne led the downturn while growth in Brisbane, Perth and Adelaide slowed.

Many economists are expecting housing conditions to remain soft in the months ahead due to interest rates, weak sentiment and tax policy changes.

The biggest monthly decline in home values in more than three years has been recorded as the housing market slowdown that began in Sydney and Melbourne spreads across the country.

According to property data firm Cotality, dwelling values fell 0.4 per cent nationally in June.

Sydney led the decline, falling by 1.2 per cent, while Melbourne values dropped 1 per cent.

The once-booming markets of Brisbane and Perth are still rising but at a much slower pace. Adelaide was flat, suggesting momentum is waning in almost every capital city.

Cotality research head Gerard Burg said the June figures marked an important turning point after months of slowing growth.

Mr Burg described a "perfect storm" of headwinds affecting demand, which he said began before interest rates started to rise earlier this year.

"Even prior to the Reserve Bank lifting rates, we saw affordability being a considerable constraint in the market," he said.

"But then we've seen three rate rises, we've seen the impact of the Middle East conflict hitting energy costs for consumers and sentiment deteriorate already during this period, as well as the tax changes, so these factors combined have really driven this downturn that we've seen."

Revised data also paints a weaker picture than previously thought, with Cotality now saying the national housing market peaked in March.

An alternative home price index from REA Group's PropTrack reported national prices fell 0.3 per cent in June, the third straight monthly decline.

Sydney and Perth recorded the biggest falls, both down 0.5 per cent, followed by Melbourne and Canberra, which each fell 0.4 per cent. Regional markets, by contrast, held steady.

Whatever dataset you look at, the trend is pointing in the same direction — house prices are weakening.

Sydney and Melbourne continued to lead the downturn but conditions were mixed elsewhere in the Cotality data.

Darwin recorded the strongest monthly growth of any capital city, with values up 1.4 per cent in June, while Hobart rose 0.6 per cent.

Mr Burg said the difference came down to the balance between supply and