Australian capital city home prices have ended in the red for the second year in a row.
The latest home value index from real estate analysts RP Data and Rismark shows capital city prices eased 0.3 per cent in December, to be 0.4 per cent down over the year.
That is a better result than 2011's 3.8 per cent decline.
RP Data spokesman Cameron Kusher says home prices improved slightly over the second half of 2012.
"Capital city home values remain 5.7 per cent lower than their historic highs of November 2010, however, dwelling values are up 1.8 per cent from their low of late May 2012," he noted in the report.
However, it has taken 175 basis points of official interest rate cuts by the Reserve Bank to generate any property price growth, and Mr Kusher says that is a sign the housing boom of the early 2000s is long gone.
"It is important to note that despite the fact that standard variable mortgage rates have fallen by an average of 85 basis points over the past year and by 135 basis points since October of last year, the housing market has still been unable to record growth in values over the year," he said.
"Home values remain below their historic highs across each capital city and have increased at an average annual rate of just 1.9 per cent over the past five years.
"It is clear that the previous strong value growth conditions to which many home owners became accustomed of recent years are well and truly behind us." Darwin was the best performing market over the past year, rising 8.9 per cent, although prices there eased 2.5 per cent in December.
Sydney was next best, with prices rising an average 1.5 per cent over 2012 despite falling 1 per cent in December.
That has kept the harbour city firmly in top spot as the nation's most expensive, with the median home costing more than $580,000.
Cheapest Hobart remained the nation's cheapest capital city to live in, with a median price of $317,500.
Prices in the Tasmanian capital were virtually unchanged over 2012, but rose 0.7 per cent in December.
Melbourne had the worst price declines over the past year, with home values down 2.9 per cent, despite a 0.5 per cent rise in December.
Brisbane and Adelaide saw 0.8 per cent declines over the past year, while Perth had a 0.8 per cent rise.
The nation's capital saw prices down 0.3 per cent in 2012, with Canberra home values sliding 1 per cent in December.
Outside the capitals, home prices across regional cities, towns and rural Australia rose 0.2 per cent over the past year and 0.4 per cent last month.
RP Data says consumers have become more cautious and focused on saving, making large home price rises unlikely, even if interest rates are cut further.
The company's analysts are predicting home price growth this year as likely to be somewhere between consumer price inflation and wage growth, which would be somewhere around the 3 per cent level.