PROPERTY prices fell in all capital cities except Perth and Darwin last month after four months of modest gains, as recent interest rate cuts failed to ignite the market.
Across Australia's capital cities, property prices fell 1 per cent over October, after a 1.4 per cent increase in September, according to the RP Data-Rismark home price index.
RP Data research director Tim Lawless said: "It is surprising to see a fall in October after a rate cut at the start of the month. It really shows that the housing market is delicately balanced at the moment."
A 3.2 per cent slide in Melbourne apartment values drove the overall decline, along with a 1.4 per cent drop in the value of houses in Sydney.
Mr Lawless said Melbourne's apartment market had shown the greatest weakness over the month and could worsen as thousands of apartments under construction were completed.
"The level of supply we've seen in Melbourne's apartments over the past five years has probably outweighed the level of demand and we're starting to see the results of that in lower rents and higher vacancy rates," he said.
Melbourne's apartment values have come off 6 per cent over the year to last month.
Mr Lawless said the declines there were outpacing recent falls in the Gold Coast-Brisbane apartment values, down 5.3 per cent over the same period.
Melbourne house prices sank 4.2 per cent.
And while house prices fell in Sydney, apartment prices there rose 0.9 per cent.
Perth houses rose 0.5 per cent and values in Darwin were up 4 per cent.
