While property prices may have begun to drop in some cities as a result of rising costs of living, they remain extremely high compared with pre-pandemic levels.

The latest market analysis from PropTrack shows that national average house prices are just 1.66% below their peak of late 2021, after a 0.43% drop in July.

Despite that, dwelling values remain 33% above what they were in March 2020.

That increase was driven in part by the huge rise in regional cities where dwelling values are 49% higher than they were before Covid.

While the latest figures show drops in Sydney and Melbourne, which are both down 3% since the start of the year, other areas are still recording price growth.

In July Sydney dwelling values dropped by 0.4% and Melbourne dropped by 0.61%, while Brisbane and Darwin recorded no change.

Adelaide dwelling values increased by 0.4% in July, while Perth rose by 0.12% and Hobart increased by 0.26%.