It was followed by the Pittwater (-7.2 per cent) and Warringah (-6.5 per cent) regions. The inner city and the Strathfield, Burwood and Ashfield region also had values drop more than 6 per cent.

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The largest unit value falls were in the North Sydney and Mosman region, at 5.8 per cent. The Pittwater and Manly regions, and the north end of the eastern suburbs — including suburbs like1 Vaucluse, Bellevue Hill and Bondi – recorded drops of more than 5 per cent.

Though the upper end of the market was leading the downturn, buyers at the extreme top of the market were not as sensitive to higher interest rates and affordability constraints, Lawless said.

Lawless noted that while the upper end of the market was leading declines, other segments were likely to catch up as the market’s downward trend gathered pace.

He added homeowners at the middle to lower end typically had more thinly stretched household budgets more affected by rising mortgage rates and the increased cost of living.

House prices across the Northern Beaches had pulled back five to 10 per cent, said Marika Martinez, of Sydney Northern Beaches Buyers Agents, and vendors had to meet the reduced borrowing capacity of buyers. Prices had shot up fast amid the flight to lifestyle locations during the pandemic and were now correcting.

“My clients of late have mostly been first house buyers. Four or five months ago they would have been looking at $2.4 million as entry level, now it’s $2 million … [buyers can’t get the funds] for the pricing to go to $2.4 million,” she said.

While rates were still very low, they were affecting buyer demand, Martinez said, noting a pullback in first home buyers, who were hit more by rising mortgage costs and were awaiting further price falls.

Equilibria Finance managing director and mortgage broker Anthony Landahl said clients with pre-approvals were deciding to wait and see how interest rates and property prices fared.

“[They’re] thinking the market is softening, if I do wait for three or six months, the opportunity will present itself … People feel maybe some prices are more inflated than they should be,” he said.

New clients, or those looking to extend existing pre-approvals, were faced with reduced spending power, but also faced lower property prices.

Landahl said it was more affordable regional markets where prices were holding up better.

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The Wagga Wagga and Inverell-Tenterfield regions recorded the strongest quarterly growth in house values, at 8.3 per cent and 7.9 per cent respectively.

Lawless said such regions were further afield than the sea- and tree-change towns that saw strong growth throughout the pandemic, and were much more influenced by the local economy and agricultural conditions than interest rates.