So where has it left us? Property experts say the past 12 months have come with challenges, as well as highlights.

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After a “very significant buoyant period” up to the end of last year, 2018 saw a shift from a seller’s market to a buyer’s market, CoreLogic Australian head of real estate Geoff White said.

“It’s been a year of change, a year of adjustment, and clearly a year where the property market had to find a new level of what’s normal,” Mr White said.

Auction numbers, clearance rates and prices dropped as banks tightened the screws on lending.

While some buyers struggled to secure finance, others decided to wait for further price falls, Mr White said.

“Between those two things, buyer activity really started to slow up.”

THE YEAR BY NUMBERS

HIGHEST CLEARANCE RATE

■ 70.7 per cent from 619 auctions
in week to February 11

LOWEST CLEARANCE RATE

■ 41.3 per cent from 1401 auctions
in week to November 18

BIGGEST AUCTION WEEK

■ 2071 auctions in week to March 25

HOME VALUES

■ Houses down 7.3 per cent to $768,929
for year to November

■ Units down 1.8 per cent to $550,389 for year to November

THE WINNERS

Amid the softening market, there were wins.

Homebuyers came out on top, Advantage Property Consulting director Frank Valentic said.

“Buyers now have a chance to negotiate and pick and choose from the market, where previously they were chasing a runaway train,” he said.

Homeowners looking to upgrade were also in a better position. While they might sell at a discount, buying in a more expensive price bracket would come with an even greater discount in dollar terms, Mr Valentic said.

First-home buyers also had wins in 2018, with less competition from investors, stamp duty concessions and lower prices in some areas.

This led to strong competition for villa units, townhouses and some houses under the $750,000 stamp duty concession threshold, he noted.

Mr White said first-home buyer incentives had driven activity in the more affordable middle to outer rings of the city.

“That has sort of been the shining light of the market this year,” he said.

Mr Valentic said while many inner areas had already peaked, outer suburbs benefited from strong activity and price growth as buyers sought value for money.

Realestate.com.au chief economist Nerida Conisbee said pockets of Melbourne defied the wider market slowdown and posted price rises.

“That decline in growth wasn’t consistent across all of Melbourne,” Ms Conisbee said.

Premium property in blue-chip suburbs like Hawthorn had also “held up”.

“Prices aren’t growing at such a rapid rate and there is a bit more confidence in the premium end of the market,” she said.

She said the performance of regional areas, particularly Geelong, Ballarat and Bendigo, was another positive.

THE LOSERS

Restrictions on interest-only lending, increased rates for investment loans and higher land tax made it a tougher environment for investors, Mr Valentic said.

People that “flip” property by buying, renovating and selling short-term also faced a huge challenge in the 2018 market, as did developers.

“Developers had to adjust their business models a lot to account for the fact they could previously rely on investors; the dominant group now is starting to become owner occupiers,” Ms Conisbee said.

Vendors also had to readjust their expectations this year.

“Many of them are still dreaming of last year’s prices and finding it hard to understand the market has shifted,” Mr Valentic said. “If prices are too high, you’re not going to sell in the current market.”

TOP PERFORMERS

The outer west was a winner for price growth. Houses in Darley, a suburb of Bacchus Marsh, had the highest yearly growth in median value, up 29.8 per cent to $558,805. Melton and Kurunjang grew 26.3 per cent and 24.7 respectively. Wallan in the outer north and Bunyip in the outer southeast also ranked high.

“They are the areas where the median values are basically within $450,000 and $550,000 and that price point has been very strong,” Mr White said.

Sunshine West had the highest growth in median unit value, up 24.5 per cent to $500,743. Patterson Lakes unit values grew 20.7 per cent and Carrum Downs unit values were up 20.2 per cent.

Reservoir was the busiest suburb for auctions, with 684 homes going under the hammer. It was followed by Craigieburn with 610, Glen Waverley with 509, Richmond with 486 and Mt Waverley with 479 auctions.

The small inner suburb of Burnley had the top clearance rate, with 91.7 per cent from its 13 auctions for the year to November 11.

LOOKING AHEAD

The outcome of the banking royal commission in February could be a key event, Mr White said.

“That might free up some lending, and that could change the market,” he said.

And despite prices coming back, long-term growth still put homeowners ahead, Ms Conisbee said.

“Some suburbs in Melbourne have more than doubled in price over a five-year period,” she added.

The fundamentals of economic growth, population increase, jobs growth and infrastructure spending also still remained in Melbourne.

“All those things that underpin price growth are still there,” Ms Conisbee said.