Housing values have dropped again, with new CoreLogic figures revealing a fall of 1.9 per cent in Newcastle and Lake Macquarie in the month of September.
The median home price in the region is now at $856,513.
However, property prices have dropped less rapidly compared to the previous month when the region experienced its biggest monthly fall in dwelling values since 1992 with a fall of 2.2 per cent over the month of August.
Figures for units in Newcastle and Lake Macquarie fared slightly better with a drop of 0.7 per cent, with the median unit value sitting at $652,738.
CoreLogic research director Tim Lawless said Newcastle and Lake Macquarie is generally holding with the pattern across most regional markets and Sydney as well.
"Housing values are down 6 per cent since their peak in April, so that's not quite as severe as Sydney which is down about 9 per cent since the market peaked," Mr Lawless said.
"So the Newcastle and Lake Macquarie markets are arguably holding up a little bit better than Sydney."
Despite the rate of decline easing in comparison to last month, Mr Lawless said it is probably too early to suggest the housing market has moved through the worst of the downturn.
"If interest rates continue to rise as rapidly as they have since May, the rate of decline in housing values could accelerate once again," he said.
He added that declining housing values had affected the volume of listings during the peak September spring selling season which is typically the busiest time of year.
"Normally at this time of year we start to see a real ramp-up of the flow of listings on the market," he said.
"We simply haven't seen that this year. In fact, the flow of listings is generally trending lower across most regions.
"I think that's reflective of prospective vendors, they are just simply staying on the sidelines for now waiting for the dust to settle, maybe waiting for selling conditions to improve"
PRD Newcastle's Craig Rosevear said spring has been an active time for buyers despite a downturn in stock.
"For well-presented properties priced right, there's good enquiry and attendance at open homes," Mr Rosevear said.
"Many of the buyers we are seeing at open homes sold during the peak of the market and are now renting and waiting to buy again.
"They didn't want to compete in a rising market but have returned now that prices have levelled out.
"The market has changed from fear of missing out to fear of overpaying.
"Auctions are working well because buyers can see social proof of what others are willing to pay and it provides a structured campaign with a timeline."
He added that buyers had shifted away from buying renovation projects.
"Due to the rising cost of building and renovating, turnkey homes that don't require any work are in demand," he said.
"An example of this is a property we are selling in Merewether Heights had 37 groups through last Saturday and 16 groups for a mid-week inspection.
"That's very strong numbers."
The latest housing values data comes on the eve of the Reserve Bank of Australia's latest meeting on Tuesday.
The RBA is expected to announce a sixth consecutive rate rise that could add more than $3000 each year to the cost of a $400,000 mortgage.
Another 50 basis point hike will take the cash rate target to 2.85 per cent, an increase of 275 basis points since May.
In the Hunter Valley (excluding Newcastle), house prices fell 0.8 per cent and units dropped 1.2 per cent, with a median value of $702,150 for houses and $519,441 for units.
