Sydney, Melbourne and Brisbane home sales drop for the first time in 2014

RP Data found for the first time in 12 months, dwelling values across Australia’s capital cities showed a monthly fall by dropping 1.9% in May.

The research indicated across most of the individual capital cities, dwelling values were down over the month, led by Melbourne with a -3.6% reduction in values, Adelaide at -1.8%, Brisbane at -1.7% and Sydney at -1.1%.

RP Data research director Tim Lawless said the shift can likely be attributed to both seasonality and more moderate housing market conditions.

"The month-on-month fall in capital city dwelling values is likely due in part to seasonal phenomenon, but may also be indicative of a broader trend towards cooler housing market conditions.”

Lawless said housing market conditions usually soften in April and May as the market rebalances from what is typically a seasonally strong first quarter and also as a result of cooler climatic conditions during the autumn and winter months.

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The Housing Industry Association echoed these findings stating new home sales recorded its first decline in five months in May.

HIA chief economist, Harley Dale said the overall profile for new home sales is a healthy one, given that May marks the first decline in new home sales this year.

“Sales grew by 3.8% over the three months to May 2014 to be up by 21% compared to the same period in 2013.”