Home prices declined in 17 suburbs across Newcastle and Lake Macquarie in the three months to August as value growth in the region slows.
Data supplied by CoreLogic shows 18.3 per cent of the 93 suburbs analysed across the region experienced a fall in dwelling values over the last quarter.
Suburbs on the western side of Lake Macquarie accounted for the highest number of suburbs with declining home values at seven (30.4 per cent) followed by Lake Macquarie East with five (17 per cent) and Newcastle, also with five (12.2 per cent).
The suburbs with the largest decline in home values over the quarter were Redhead (-2.3 per cent); Bonnells Bay (-1.7 per cent); Newcastle West and Kilaben Bay (both -1.4 per cent); Coal Point (-1.3 per cent) and Cooks Hill (-1.2 per cent).
Home prices in Swansea, Newcastle, Newcastle East, Valentine, Fishing Point, Marks Point, Belmont, Cooranbong, The Hill, Wangi Wangi and Arcadia Vale also dropped in the last quarter.
"When we look at suburb-level value declines, one thing we have seen more broadly is that it tends to the higher-end markets that have started to lead that decline in value," CoreLogic economist Kaytlin Ezzy said.
"Markets that have a median over $1 million typically tend to be the first to show weakness when it comes to a shifting market which is what we are in at the moment.
"Across Brisbane and other capitals, the more expensive markets are in decline, so it isn't surprising to see a similar pattern play out across the Newcastle region."
Suburbs with the largest fall in values
Across the broader region, Fingal Bay in Port Stephens recorded the largest drop in values, down 3.4 per cent over the quarter and -6.9 per cent in the past 12 months.
In the Lower Hunter, Dungog, East Branxton and Branxton recorded the largest quarterly declines, down 3.3 per cent, 1.5 per cent and 1.4 per cent, respectively.
Maitland on the rise
Meanwhile, Maitland LGA dominated a list of suburbs with the highest dwelling value growth over the quarter.
Morpeth recorded the largest dwelling value growth at 4.5 per cent, with Lochinvar (4.1 per cent); Bolwarra (3.3 per cent); Telarah (3.2 per cent); and Thornton (3.1 per cent) also listed in the top 10 suburbs analysed across Maitland, Port Stephens, Newcastle, Lake Macquarie and the Upper Hunter.
"It does tend to be the more affordable suburbs that are more resilient in this kind of market," she said.
"As you see the more expensive markets start to dip in to decline, people start to shift their demand to the more affordable markets so they tend to be more resilient to those price falls.
"Given that we have seen such a strong rise in values over the past couple of years and worsening affordability constraints, that is likely being magnified with more people looking to those more affordable pockets.
"That is helping support value growth in those areas."
In Newcastle and Lake Macquarie, Adamstown Heights earned a spot in the top 10 with home values up 3.3 per cent over the quarter alongside Teralba (also 3.3 per cent).
In Port Stephens, Soldiers Point recorded the second-largest home value growth across the regions over the quarter, up 4.2 per cent.
Newcastle and Lake Macquarie "resilient"
Overall, home values in almost 30 per cent of the 3,655 suburbs analysed by CoreLogic across Australia are in decline.
In regional NSW, 223 (43.1 per cent) of 517 suburbs analysed recorded a decline over the quarter.
Ms Ezzy said the Newcastle and Lake Macquarie region had shown resilience compared to other markets in NSW.
"It is slightly more insulated than Sydney and some of the other regional markets," she said.
"Newcastle has benefited more recently from that continued shift away from the capitals, so as Sydney was becoming more expensive a couple of months ago, we saw some of that demand flow out to Newcastle and the Illawarra.
"It is still benefiting from that but probably to a lesser extent as we are seeing the pace of growth ease across the region."
