Australian property prices continued to race upwards last month, but the nation's two biggest cities have started lagging well behind.
For the first time in 17 months, Sydney property prices recorded a monthly fall, of just 0.1 per cent in February.
"Not much of a decline, the equivalent of about $1,000 at the median value level, but I think it's definitely a sign that the market is shifting slightly from a sellers' to a buyers' market," said CoreLogic's head of Australian research Eliza Owen.
Melbourne prices were flat for the month and up just 0.2 per cent over the past three.
"Even before an official rise in the cash rate, there are headwinds for the housing market," explained Ms Owen.
Smaller capitals, regions see biggest rises
But market conditions remain very different among the smaller capitals and regional areas, with Brisbane (+1.8pc), Adelaide (+1.5pc) and regional Australia (+1.6pc) recording the biggest monthly price rises.
Kate Grace is preparing to pack up the home that has been in her family's hands for three generations.
"It was built by my grandparents and then I bought it from my grandmother's estate when she passed away," Ms Grace told The Business.
But, with Adelaide prices soaring 25.8 per cent over the past year, Mrs Grace said now was the time to make the most of those increases.
The 1958 three-bedroom, one-bathroom brick house on 800 square metres is in the sought-after Adelaide suburb of Hampstead Gardens, about 8 kilometres from the city centre.
Agent Megan Tamlin had not even listed it properly before offers started coming in.
"I put it on Facebook, not a paid ad, just a little organic ad … and my phone just started ringing," agent Megan Tamlin explained.
"One of these buyers was quite bold and was quite happy to offer a premium price.
"We're still working through the details of that offer, the ink isn't dry just yet, but it's looking very, very promising for them."
The deal is a sign of just how heated Adelaide's property market remains.
Ms Tamlin said interstate migration has put pressure on the local market.
"We have a stock shortage in Adelaide at the moment," she said.
Only Brisbane (+29.7pc) and Hobart (+26pc) have had bigger annual price rises.
Regional areas (+25.5pc), Canberra (+23.8pc) and Sydney (+22.4pc) all had gains above 20 per cent over the past year.
"Regional housing markets aren't immune from the higher cost of debt as fixed-term mortgage rates rise. These markets are also increasingly impacted by worsening affordability constraints as housing prices consistently outpace incomes," said CoreLogic's director of research Tim Lawless.
But even the weakest capital city market, Perth, had an 8.6 per cent rise over the past year, while Darwin (+12.3pc) and Melbourne (+12.5pc) had double-digit increases.
'I don't want it to go up anymore'
That has been a problem for Joanne Kim, who has had to rethink her dream of buying a small apartment in Sydney's inner suburbs.
While prices may have eased marginally last month, Sydney remains by far the most expensive city to buy a home.
"I've been getting feedback from all my friends and family that maybe I'm being too ambitious, but I really love Drummoyne and Balmain," she said.
"I've been trying to look for one to two-bedroom apartments in those areas, but this is where things have drastically changed since last year.
"I think I was able to find two-bedders in Balmain between the $800,000 to $900,000 mark, but I can't find anything like that these days."
Apartments like that are now selling for almost twice as much, making it difficult for many people to buy.
"Only last week, I was looking for an apartment that I thought was going to go for around the $800,000 to $900,000 mark, but it sold for $1.5 million."
Ms Kim spends her weeks trawling real estate sites and her Saturdays at open homes in her continued pursuit of owning her own home and hopes increasing interest rates will work in her favour.
Mr Lawless said there was a reasonable chance that Ms Kim might get her wish.
"The pace of growth in housing values started to ease in April last year, when fixed-term mortgage rates began to face upwards pressure, fiscal support was expiring and housing affordability was becoming more stretched," he wrote.
"With rising global uncertainty and the potential for weaker consumer sentiment amidst tighter monetary policy settings, the downside risk for housing markets has become more pronounced in recent months."
