Sydney housing market is dragging Australia's home values down.

The Sydney housing market just witnessed its biggest home price drop over the past 30 years, pulling overall prices down over the past 12 months.

October figures from CoreLogic showed a 3.5% decline in national home prices over the past year, with Sydney reporting the highest decline amongst all state capitals at 7.4%.

Melbourne, Perth, and Darwin also posted negative price growths annually at 4.7%, 3.3%, and 2.9%, respectively.

CoreLogic head of research Tim Lawless reiterated that the tighter conditions have continued to play part in the housing activity slowdown and lower dwelling values across Australia.

"With such broad-based weakness in housing market conditions, it’s clear that tighter credit availability is acting as a drag on housing demand and impacting adversely on the performance of housing values across most areas of the country," he said.

"The latest results take the annual decline across the national index to 3.5%, signalling the weakest macro-housing market conditions since February 2012, with our hedonic home value index reporting a 0.5% fall in dwelling values nationally in October," he said.

On a quarterly basis, national values declined at a slower rate of 1.4%, with Sydney, Melbourne, and Perth witnessing 2% price declines. 

Meanwhile, Australia's regional markets posted varied performances over the past month. Regional Tasmania stood out as the only market which recorded a double-digit growth of 11.4%. This is due to increased demand while supply is at low levels.

Regional Victoria also saw healthy growth in values as home buyers abandon Melbourne for more affordable properties outside the metropolitan areas.

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