Australian house prices continued to rise in January, with increases spreading beyond the booming Sydney and Melbourne markets.

The big south-eastern cities continued to lead price rises, but all other capitals posted gains, including modest 0.1 per cent increases for the struggling Perth and Darwin markets.

However, the top 10 capital-city price increases were in areas of Sydney and Melbourne, while six of the 10 biggest falls were in Perth and its surrounds.

Regional Tasmania had the three strongest areas for price growth outside the capitals, while outback Queensland and WA led regional declines.

Overall, CoreLogic’s figures show the pace of growth has slowed from peaks during the spring selling season, with capital city prices rising 0.9 per cent on average, while regional markets typically posted a 0.7 per cent increase.

“Factoring in the seasonal effect, the latest results indicate a reduction in the speed of growth across most markets, especially for Sydney and Melbourne where affordability constraints are once again becoming more pressing,” CoreLogic’s head of research Tim Lawless said.

“We were seeing values rising by nearly 3 per cent back in November month-on-month in Sydney.

“That growth rate is now reduced down to 1.1 per cent, and Melbourne’s reduced from a peak monthly rate of 2.3 per cent in October down to 1.2 per cent in January.

“So I think we are seeing the effects of worsening housing affordability and maybe some early signs that higher stock levels on the market are starting to dampen this very high rate of capital gain.”

Mr Lawless expects that weaker trend in price growth to continue as an increasing number of property owners take advantage of a rising market to sell.

“Our expectation is that through the March quarter we probably will see listing numbers rising much more substantially as we see home owners taking advantage of what have been quite strong selling conditions,” he told ABC News.

Nationally, housing values have rebounded 6.7 per cent since reaching a low point in June last year, but they are still 2.2 per cent below the most recent peak in October 2017.

Despite this, falling rents mean the return for property investors in Sydney is at a record low of 3 per cent, while the yield in Melbourne is also very low at 3.2 per cent.

Nationally, rents increased by just 1.3 per cent over the past year — below inflation and wage growth, with Hobart (+5.8 per cent) the only capital where rents were increasing substantially faster than incomes.

However, CoreLogic also noted the average three-year fixed mortgage rate for investors was 3.48 per cent, meaning landlords in many Australian capitals could be making positive returns, while it may be cheaper for people in some capital cities to meet mortgage repayments than pay rent.

–ABC