Sydney has appeared as the lone bright spot in a weak month for median house prices.
RP Data figures show Sydney saw 0.4% growth in median house prices for December, while capital cities on average fell 1.2%. While capital city values declined for the quarter, RP Data research director Tim Lawless said there was room for optimism in the result.
"The December quarter was the year's smallest quarterly decline," Lawless said.
Moreover, successive RBA rate cuts could provide a boost to housing in the months ahead.
"We expect that the RBA's interest rate cuts in the final two months of 2011 will lend further momentum to housing activity as transaction volumes pick up over February and March after the seasonally slow months of December and January," Rismark's Ben Skillbeck said.