Australia’s housing market got a battering over the Christmas break, with capital city home prices posting the biggest monthly fall in 36 years over December.

The total decline for the month was 1.3 per cent, the largest price fall in a month since January 1983, according to CoreLogic’s hedonic home value index that was released today.

The weak December activity meant the average price of a home in the country’s capital cities fell 6.1 per cent for 2018, the sharpest yearly decline in prices since March 2009.

Sydney and Melbourne were the biggest drag on national dwelling values.

The Sydney median home price fell 8.9 per cent for the year, while Melbourne’s fell 7 per cent.

Ongoing economic troubles and high unemployment meant Perth also recorded a big fall, with its median dropping 4.7 per cent.

Brisbane and Adelaide remained the most stable capital city markets over the year, recording median price growth of 0.2 per cent and 1.3 per cent, respectively.

Hobart was the only capital with a major upturn in prices, with the median climbing 8.7 per cent annually.

CoreLogic head of research Tim Lawless said the current weakness across the national market was broadbased and no longer confined to only Sydney and Melbourne.

“Although Australia’s two largest cities are the primary drivers for the weaker national reading, most regions around the country have reacted to tighter credit conditions by recording weaker housing market results,” Mr Lawless said.

Property analyst Cameron Kusher said the Melbourne market was becoming particularly weak.

The Victorian capital had been in better shape than Sydney for much of 2018, but the delayed downturn has hit the city harder, he said.

“The Melbourne downturn could become bigger,” he said.

“Melbourne prices continued to grow at a consistent rate for much of the past decade at a time when there wasn’t much growth in other capitals. Affordability is now very stretched.”

He added that someone on a median wages would have to spend 17 times their income to buy an average Melbourne house. “Banks are being very cautious about debt to income levels so (financing) has become challenging,” he said.

Affordability in Melbourne was more stretched than in Sydney in many ways because Sydney’s higher prices often reflected the fact that more homes had water views, according to Mr Kusher.

“A lot of the really expensive houses in Melbourne don’t have water views. Sydney might be more expensive but you get a lot more.”

The flat conditions in Brisbane, at a time when prices were falling by record margins in Sydney and Melbourne, reflected Brisbane’s better affordability and diverse economy.

Brisbane also attracted considerable interstate migration, which pushed up housing demand, according to CoreLogic.

The stability of the housing market in Adelaide meant it was now the country’s cheapest capital to buy a home.

Mr Kusher said Adelaide would likely hold that title for some time. “The economy is not particularly strong and it is not getting high interstate migration so that has kept prices consistent.”