NEWCASTLE'S housing downturn has gathered steam, with the region experiencing its biggest monthly fall in dwelling values since 1992.
New data from CoreLogic shows that the Newcastle and Lake Macquarie region recorded a 2.2 per cent decline in dwelling values over the month of August.
The last time Newcastle had a fall in dwelling values larger than 2.2 per cent was in December 1992, when values fell by 2.4 per cent.
Over the past three months, values in the region have fallen 4.2 per cent, the second fastest rate of decline in regional NSW after Richmond-Tweed, down 8.8 per cent, and equal to the Southern Highlands and Shoalhaven.
House values were hit hardest in August, falling by 2.4 per cent, while unit values fell by 1.5 per cent. The current median house price in Newcastle is $873,931, the median unit price is $657,476.
In the Hunter Region, house prices fell by 1.6 per cent in August and 2.4 per cent over the quarter, to sit at a median price of $708,933.
Unit prices continued to clock marginal monthly growth of 0.8 per cent, with the current median price $522,409.
Price declines weren't isolated to the Newcastle or Hunter regions, with a similar story playing out across the country.
Dwelling values nationally declined by 1.6 per cent, the largest month-on-month decline since 1983.
Every capital city apart from Darwin is now in a housing downturn, with a similar scenario playing out across the rest-of-state regions, where only regional South Australia recorded an increase in housing values for the month.
Core Logic research director Tim Lawless said the decline in regional house prices was expected.
"We were always of the view that the regional markets wouldn't be immune to price falls," he said.
"The rate of decline is clearly lagging the capital cities as well and, potentially, we could see the regional markets overtake the capitals considering regional Australia did see a much stronger phase of growth in values across the combined regions of about 42 per cent through the growth phase compared to about a 26 per cent rise in the capitals."
Mr Lawless said that concerns about affordability were likely contributing to the sharp decline.
"It has been a very strong market on the upside, so there's that. There's also the fact that even though we aren't seeing median values as high as what they are in the Southern Highlands and Shoalhaven, [Newcastle's] is still relatively high," he said.
"With a median house value of nearly $874,000 there are still some affordability constraints at play here."
