Australia's housing market is continuing to cool down, with prices — on a national basis — recording their first annual decline (-0.4 per cent) in six years.
This development comes one month after the nation's combined capital cities experienced their first annual fall since November 2012.
The average capital city price fell 0.2 per cent in May, according to the latest figures from property analysis firm CoreLogic.
Melbourne has also overtaken Sydney as the worst-performing Australian capital.
Property prices in Australia's second largest city fell 0.5 per cent last month, and 1.2 per cent in the last quarter — with the median price down to $717,020.
In comparison, Sydney dwelling prices slipped by 0.2 per cent in May, and 0.9 per cent in the last three months.
Sydney's median price is $871,454, a figure which includes houses and apartments.What's behind the fall?
CoreLogic's head of research Tim Lawless believes tougher lending standards, plus weaker conditions in Sydney and Melbourne are behind the drop.
"Sydney and Melbourne comprise approximately 60 per cent of Australia's housing market by value, and 40 per cent by number," he said.
"So the performance of these two cities has a larger effect on the headline market performance."
In the last three months, property prices rose slightly in Perth (+0.1pc), Brisbane (+0.2pc) and Adelaide (+0.3pc).
Prices lifted considerably higher in Canberra (+0.8pc), Darwin (+1.3pc) and particularly Hobart (+3.7pc) over the quarter.
'Unsustainable' Hobart still leads
Tasmania's capital remains, by far, the best-performing housing market — gaining 0.8 per cent in May, and 12.7 per cent over the past year.
CoreLogic wrote, in its report, that Hobart's "impressive run of capital gains is showing little signs of slowing down".
However, Mr Lawless told the ABC subsequently: "I think the growth rate in Hobart and broader Tasmania is unsustainable, just like Sydney was unsustainable for many years — as was Melbourne's."
"It looks like it will take further months for conditions to slow down.
The trends ahead
"We are already seeing plenty of evidence that affordability constraints are starting to bite in Hobart for buyers and renters."
Amid the fall in national prices, driven by Sydney and Melbourne, regional markets have outperformed the capital cities.
Regional real estate values jumped by 1 per cent in the last three months, and 2.2 per cent over the past year.
This was driven by price rises in Geelong, Victoria (+10.2pc), and a mixture of satellite cities across NSW, Queensland and Tasmania.
These include the Southern Highlands and Shoalhaven (+6.8pc), Launceston (+6.6pc), and the Sunshine Coast (+5.8pc).
Mr Lawless considers the chances of rebound in housing conditions to be remote.
"With finance restrictions likely to remain tight, despite lifting the 10 per cent growth cap on investment lending next month, the chances of a rebound in housing market conditions over the coming months is unlikely."