HOUSE values in Newcastle, Lake Macquarie and the Hunter Valley are slightly up from last month however, experts say it remains uncertain whether the stabilisation can be sustained.
CoreLogic's Home Value Index released today revealed a sharp reduction in the rate of decline throughout February with the smallest monthly fall across Australia since May 2022.
House values across Newcastle and Lake Macquarie recorded a rise of 0.1 per cent last month. The median house value is currently $818,893 which is up from $815,469 in January.
Houses in the Hunter Valley also recorded a slight increase of 0.2 per cent to hold a median of $671,926.
Units in the Hunter Valley recorded growth of 0.2 per cent however, unit values in Newcastle and Lake Macquarie fell 1.4 per cent to a median of $634,721.
The national index declined 0.14 per cent over the month, the smallest monthly fall since the Reserve Bank of Australia's rate hikes commenced in May 2022.
Regional housing values remain 30.7 per cent above levels recorded at the start of the pandemic in March 2020.
CoreLogic head of research Eliza Owen said a number of factors could be attributed to the region's stabilising of house values in February.
"The Hunter Valley is possibly benefiting from a bit of a spillover in demand across Newcastle and some of the coastal areas but like many markets across Australia, Newcastle and Lake Macquarie is following this trend of shrinking monthly declines and some temporary reprieve in the house market downswing," Ms Owen said.
"It may turn around a bit as we head further into the year but it is too early to say."
According to CoreLogic, the stabilisation of housing values in February coincides with consistently low advertised supply levels and a rise in auction clearance rates.
The trend towards a below-average flow of new listings has been evident since September last year, coinciding with a loss of momentum in the rate of value decline.
Ms Owen said it remains unclear whether this reprieve could be short-lived.
"Are we at the bottom [of house price declines] or is this more that we are in the eye of the storm?" she said.
"Frankly, I think it might be the latter. I think that we haven't seen the end of housing market declines just yet given that there are further interest rates expected in the coming months.
"We've still got a lot in the way of cost of living pressures, real wages, growth falling and the potential shock of fixed rate borrowers rolling into the variable environment this year and that all presents headwinds for housing market performance."
Dowling Property Group Mayfield listing agent Joe Di Claudio said he was not surprised to learn that house values had shown signs of stabilising in the region.
His listing of an updated three-bedroom property at 6 Bull Street, Mayfield falls just under the median with a guide of $795,000.
The home went on the market a week ago and is already under contract after 23 groups inspected the property during the first open house on the weekend.
Properties around the median of $818,839 are in small supply and a lack of stock on the market was keeping prices steady, according to the agent.
"Demand is what drives the prices and so there is still good demand for properties," Mr Di Claudio said.
"Everyone's theory is that the market is pretty flat but areas like Mayfield tend to be bucking that trend.
"If we have anything that is good quality at the moment that has three bedrooms, a good bathroom and a good kitchen and a garage, they'll go for $900,000.
"I think the market is suffering but I don't think we've lost too much ground."
