If you're thinking of getting into the housing market, now might be a good time to make the jump.

House prices nationally declined in December, for the first time in two years, according to the latest report from the REA Group.

The PropTrack Report on the home price index showed Melbourne and Canberra saw the biggest drops, while regional prices mostly remained stable.

"While December was the first month in which national home values declined in two years, price growth momentum had been slowing since March 2024," said REA Group Senior Economist Anne Flaherty.

"This slowdown has been seen across both capital city and regional areas.

"Contributing to the slowdown - and reversal - of price growth, the number of properties for sale has been relatively high over the second half of 2024, particularly compared to the same period in 2023," Ms Flaherty said.

"This has given buyers more choice and we're seeing them take more time when purchasing."

She said the impact of stage 3 tax cuts had been counteracted by "softer economic conditions", particularly when the anticipated interest rate cuts didn't materialise.

Key findings:

• National home prices fell by 0.17 per cent over the month, though remain 4.73 per cent higher compared to 12 months ago.
• Capital city areas led the decline, falling by 0.25 per cent over December. Regional areas were more resilient, rising by 0.03 per cent.
• Canberra (-0.61 per cent) and Melbourne (-0.53 per cent) recorded the sharpest drops in prices.
• Prices across most of Australia's regions were mostly stable in December, with the exception of regional South Australia (+0.6 per cent)

Despite the drop in December, national home prices remain well up from a year ago, with values sitting 4.73 per cent higher year-on-year. Compared to March 2020, national home values are 45.1 per cent higher.

Melbourne is currently considered the third most affordable city in Australia, behind Hobart and Darwin, according to the report.

"Victoria has been relatively more successful in building more homes compared to the other states," the report stated.

"It also continues to see a strong investor exodus due to significant tax deterrents decreasing demand and driving up supply."

Regional Victoria

According to the REA Group, the peak month for property prices was April 2022. Since then, prices are down 5.18 per cent.

In regional Victoria, annual growth in house prices is down 2.16 per cent, with median value of $593,000 for houses and $411,000 for units.

In December 2024, prices dropped by 2.08 per cent.

Bendigo and Warrnambool and South West Victoria were the strongest performing areas in rural Victoria.