The embryonic housing market recovery has stumbled, with home values falling in most states last month. But while values slumped, sales of new dwellings ramped up.
New home sales bounced back in March, rising 4.2 per cent after falling in February, Housing Industry Association figures show.
But dwelling values contracted by 0.5 per cent over April after posting a solid 2.8 per cent gain over the first three months of 2013, according to property analysts RP Data.
Analyst Tim Lawless said the figures represented "a stumble" on the path towards recovery rather than suggesting home owners were facing a new round of falling prices.
"When viewed in line with other metrics such as auction clearance rates, private treaty indicators and some improvement in housing finance demand, it is likely that the negative April result will be a blip along the path to recovery," Mr Lawless said.
The healthier figures for new homes sales - showing sales of detached houses rising 3.9 per cent and units by 5.6 per cent - suggested the housing market was maintaining a "modest recovery", HIA chief economist Harley Dale said. "A bounce back in March after a disappointing result for February is a good result to see," he said. "It was important we saw a rise, even one that didn't completely eradicate the February decline."
But the "blip" in home values follows a senior Reserve Bank of Australia official cautioning last week that the housing market was shifting to a "new normal" with price growth slower than most Australians had witnessed over the past 30 years.
Home owners could expect to see more instances of house prices falling, albeit only "mildly", the RBA warned. Banks should not loosen lending standards in a bid to "bring back the boom times" and boost profits, it said.
Across the major cities, Sydney values were down 0.4 per cent, Melbourne's 0.5 per cent, Brisbane's 0.7 per cent and Perth's a substantial 2.5 per cent.
Dwelling values in Adelaide were up 2.8 per cent over the month and Darwin's rose by 0.2 per cent, but RP Data cautioned the rise in Adelaide was likely due to "natural volatility" from a small number of sales.
Over the year to April, Australia's dwelling values were up 2.7 per cent and units rose 2.5 per cent.