Despite the recent fluctuations in the market, residential properties have managed to come out ahead of the sharemarket, according to a new report.

The RP Data Hedonic Index showed that Australian property values fell marginally by 0.03% to $461,384 in the first four months of the year. In sharp contrast, the ASX/S&P 200 index lost 11.7% in the same period.

Over the past 12 months, property values climbed by 8.2%. Tim Lawless, research director with RP Data, said he believes property prices will increase further in the next five years due to the current shortage in housing supply.

"We expect the low level of housing supply to continue placing upwards pressure on housing prices over the long term," he said. "However, in the short to medium term, demand side constraints are acting to slow the market. More importantly, the current high inflationary environment is causing a high degree of certainty in the market, which translates to low buyer and investor confidence."

On the bright side, Lawless noted that buyers now have a large amount of leverage as a result of the slower market. He pointed out that the best immediate opportunities can be found in Adelaide, Brisbane and Darwin, and in some regional areas of Queensland.

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