CoreLogic's Home Value Index rose another 1.5% in September, taking Australia's housing values 20.3% higher over the past 12 months.
According to the report, the annual growth rate is now tracking at the fastest pace since 1989.
Although growth conditions remain positive, September's results are down on the peak rate of growth in March when dwelling values nationally increased by 2.8%.
ABS data released on Friday also shows that in August, new home loan commitments fell 4.3% for housing, seasonally adjusted.
Owner-occupier home loan commitments fell 6.6%.
In August 2021 the number of first home buyer new loan commitments fell 3.0%, the seventh consecutive month of falls.
It fell 2.1% compared to August 2020, the first through-the-year decline seen in two years.
That said, the average first home buyer home loan continued to grow, up $4,000 to $464,000 in a month (chart below).
In terms of mortgage value, there was also a marked slide according to ABS' head of finance and wealth Katherine Keenan.
"The value of new loan commitments for owner-occupier housing saw the largest fall since May 2020," Ms Keenan said.
"Despite this fall, the value of loan commitments was 34% higher compared to a year ago and 53% higher than pre-COVID levels in February 2020."
Lockdown-affected states led the decline in value of new home loans written, with NSW falling 9.6%, Victoria 4.9% and ACT 11%.
Change in Dwelling Values: CoreLogic
| Month | Quarter | Annual | Total Return | Median Value | |
| Sydney | 1.9% | 5.7% | 23.6% | 26.5% | $1,056,093 |
| Melbourne | 0.8% | 3.3% | 15.0% | 17.9% | $775,142 |
| Brisbane | 1.8% | 5.9% | 19.9% | 24.7% | $625,291 |
| Adelaide | 1.9% | 5.5% | 19.1% | 24.0% | $529,376 |
| Perth | 0.3% | 1.2% | 18.1% | 23.2% | $524,589 |
| Hobart | 2.3% | 6.4% | 26.8% | 32.5% | $659,622 |
| Darwin | 0.1% | 1.7% | 20.2% | 26.8% | $481,767 |
| Canberra | 2.0% | 6.9% | 24.4% | 29.0% | $838,904 |
| Combined Capitals | 1.5% | 4.7% | 19.5% | 22.9% | $759,753 |
| Combined Regionals | 1.7% | 5.1% | 23.1% | 28.6% | $503,609 |
| National | 1.5% | 4.8% | 20.3% | 24.1% | $674,848 |
Source: CoreLogic
The monthly change in housing values remains positive across every capital city and broad rest of state region, with Hobart (2.3%) and Canberra (2.0%) recording the largest growth.
Darwin (0.1%) and the recently revised Perth index (0.3%) recorded the softest growth conditions across the capitals.
Across regional Australia, regional NSW (2.0%), regional Tasmania (1.7%) and Regional Queensland (1.7%) led September’s capital gains.
CoreLogic's research director, Tim Lawless, believes the slowing growth conditions are the result of higher barriers to entry for non-home owners along with fewer government incentives to enter the market.
"With housing values rising substantially faster than household incomes, raising a deposit has become more challenging for most cohorts of the market, especially first home buyers," Mr Lawless said.
"Sydney is a prime example where the median house value is now just over $1.3 million. In order to raise a 20% deposit, the typical Sydney house buyer would need around $262,300."
Mr Lawless also pointed to the tough conditions first home buyers may face.
"Existing home owners looking to upgrade, downsize or move home may be less impacted as they have had the benefit of equity that has accrued as housing values surged," he said.
"The slowdown in first home buyers can be seen in the lending data, where the number of owner occupier first home buyer loans has fallen by 20.5% between January and July.
"Over the same period, the number of first home buyers taking out an investment housing loan has increased, albeit from a low base, by 45%, suggesting more first home buyers are choosing to 'rentvest' as a way of getting their foot in the door."
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