Some of the heat continues to come out the Australian property market as new data shows the pace of housing price growth continues to come under pressure from record-low rental yields.
The latest figures from CoreLogic RP Data show that over the month of October dwelling values across the combined capital city index lifted 0.2 per cent.
Over the quarter, the combined capital city index lifted 1.4 per cent and over the year it increased 10.1 per cent, down on September's 11 per cent annual growth rate.
The nation's hottest property markets, Sydney and Melbourne, both saw the rate of capital gain continue to ease over the month, but dwelling values over the period still increased 0.3 and 0.6 per cent respectively.
Melbourne continues to gain on Sydney, with dwelling prices increasing 3.1 per cent over the quarter, compared to Sydney's 1.5 per cent.
Over the year, however, Sydney still leads, chalking up dwelling price growth of 15.6 per cent, compared to Melbourne's 12.8 per cent.
Sydney remains the most expensive city with a median dwelling price of $800,000, well ahead of Melbourne at $600,000.
CoreLogic RP Data head of research Tim Lawless said the result was not solely attributable to the big four banks all recently hiking rates outside of the Reserve Bank of Australia's raising cycle.
"We are also seeing approximately a 30 per cent premium on investment related mortgage rates, tighter lending standards and borrowers generally requiring a larger deposit," he said.
“Gross rental yields at record lows and affordability constraints are acting as a further disincentive, particularly in Sydney where the median unit price is equal to, or higher than the median house price in every other capital city."
New housing supply is moving through record levels which should help to ease the upwards trajectory of home values, he said.