HOUSE values in Newcastle and Lake Macquarie recorded a second consecutive month of growth in October.
CoreLogic's national Home Value Index (HVI) report shows house prices increased 0.2 per cent in October to hold a median value of $863,276.
The strengthening values followed a rise of 0.5 per cent in September which came after a fall of 0.4 per cent in August.
Units values recorded the biggest jump in Newcastle and Lake Macquarie in October with a 1.9 per cent rise taking the median value to $656,507.
Dwelling values (houses and units) rose 0.5 per cent.
Despite another month of growth, Core Logic research director Tim Lawless said the region's housing values had shown a clear slowdown in the quarterly pace of growth trend.
"It is definitely slowing down," Mr Lawless said.
"Dwelling values in regional NSW are up 0.6 per cent over the month and Newcastle is up 0.5 per cent but you can see in the quarterly numbers, Newcastle's 0.7 per cent is about half the growth rate that we have seen across regional NSW over the rolling quarter.
"It just really highlights that even though values are rising locally, they're not rising anywhere near as quickly as they were over the three months to June which, at the moment, looks to be the peak rate of growth through this upswing."
In the Hunter Valley (excluding Newcastle), house values recorded an uptick of 0.7 per cent to hold a median value of $691,740 and units values rose 0.5 per cent with a median value of $515,744.
Mr Lawless said the lift in values could be attributed to higher levels of stock coming on to the market.
"A big part of it simply comes down to the fact there is more stock," he said.
"If you look at listing numbers across Newcastle and Lake Macquarie, there are about 1840 listings in the market which is up about 10 per cent from June and around 11 per cent from the same time a year ago.
"Buyers have more choice which has taken a bit of heat out of the market."
Across Australia, CoreLogic's national Home Value Index rose a further 0.9 per cent in October, accelerating from a 0.7 per cent rise in September.
Since finding a trough in January, the national HVI has increased 7.6 per cent, leaving the index only half a percent below the historic high recorded in April last year.
Mr Lawless noted the national HVI could reach a new record high mid-way through November at the current rate of growth, recovering from the 7.5 per cent drop in values recorded over the downturn between May 2022 and January 2023.
In Newcastle and Lake Macquarie, house values remained 4.4 per cent down from the market peak in April 2022.
"We have seen that local values have risen 4.7 per cent since they bottomed out in February but they still need to rise another 4.4 per cent to reach that record high," he said.
"At the current rate of growth we are not going to achieve that this year and, arguably, we could see the rate of growth in Newcastle and Lake Macquarie slowing further from here."
Mr Lawless said regional markets continued to lag behind capital cities.
At a broad level, the combined regional index was up 0.7 per cent in October compared with a 0.9 per cent rise across the combined capitals.
Mr Lawless said the trend of higher growth in the capitals was evident across every state.
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