The national median house price has fallen for the first time in three years.

The percentage drop may only be a small 0.4 per cent, but when you talk about a weighted average median house price of $695,788 that is equivalent to about $2700 less.

According to the Real Estate Institute of Australia president Neville Sanders the December quarter figures showed a settling of the market.

“It (the result) is indicative of a stabilisation of the market,’’ he said.

“It is evening out, there is no lack of confidence out there.

“Different sectors of Australia are producing different results for various economic reasons. Some of the smaller states that have been struggling a bit are starting to see a lift in prices and activity.’’

Mr Sanders said some states were still experiencing price growth but drops in others meant the overall figure was down.

He said strong growth in Hobart, Canberra and Brisbane during the period were not enough to offset falling median house prices in Sydney and Melbourne.

Mr Sanders said annual price growth was still strong but lower than the previous couple of years.

He said Sydney had been the strongest market in the recent years, but some commentators were speculating whether the city’s housing market had reached its peak.

“Uncertainty around the future on negative gearing arrangements is expected to

further contribute to the decline in investor activity. With this, owner occupiers continue to have

a strong presence in the stabilising market.’’