CoreLogic data reveals fall of 1.8 per cent in house values across Newcastle and Lake Macquarie in October

The figure is slightly down from a fall of 1.9 per cent recorded last month.

The median house price in the region is now at $841,296.

In comparison, unit values are faring better after recording an increase of 0.2 per cent in Newcastle and Lake Macquarie during October with a median price of $654,015.

In the Hunter Valley (excluding Newcastle), house values fell 1.2 per cent with a median price of $689,980 and units also fell 0.2 per cent with a median price of $505,132.

Australia's housing downturn broadened through October with every capital city and rest-of-state region (apart from regional South Australia) recording a drop in housing values last month.

CoreLogic's national Home Value Index moved through six months of consistent declines, as values fell a further 1.2 per cent in October.

CoreLogic's research director Tim Lawless said regional areas have had a "fairly stable" rate of decline compared to larger capitals, adding that homeowners in Newcastle and Lake Macquarie are still in a strong valuation position due to the fact that house values increased by 44.8 per cent during the growth period.

The region's housing values have dropped 7.4 per cent since the peak in April.

"Regional areas seem to be lagging somewhat in the trends," Mr Lawless said.

"By that I mean they showed us stronger and longer growth runs through the upswing and now they're starting to catch up with the capital cities in terms of the rate of decline.

"We saw Newcastle and Lake Macquarie move through a peak back in April, so pretty much in line a month or so later than what Sydney did.

"Most homeowners in the region are still in a very strong valuation position.

"It's only those people that may have purchased in the last six months or so that are going to be facing a value that's lower than what they paid for the property."

Mr Lawless said it is probably still too early to claim the worst of the decline phase is over.

"Despite the easing in the pace of decline, with Australian borrowers facing the double whammy of further interest rate hikes along with persistently high and rising inflation, there is a genuine risk we could see the rate of decline re-accelerate as interest rates rise further and household balance sheets become more thinly stretched," he said.

"To date, the housing downturn has remained orderly, at least in the context of the significant upswing in values.

"This is supported by a below-average flow of new listings that are keeping overall inventory levels contained.

"There's also tight labour market conditions, an accrual of borrower savings and a larger than normal cohort of fixed interest rate borrowers, who have so far been insulated from the rapid rise in interest rates."

Homeowners Krystle and Lucas purchased a four-bedroom home in Mayfield at auction in early September.

The couple was confident that the price was within their budget after having their original home valued.

They took out a bridging loan to fund the purchase until they sold their first home, also in Mayfield, which they bought in 2007.

"We had our budget and knew that we could sell our property for a reasonable amount within the current market, so it felt OK," Krystle said.

"We had been in our first home for 15 years so our mortgage was manageable"

Krystle said that even though interest rates were on the rise when they purchased the home, house prices appeared to have remained strong.

"We bought in early September and settled on October 10 so when all that was going through, the market was still not too bad," she said.

In the months since buying the home, Krystle said rising interest rates and a drop in housing values have added stress to their situation.

The couple is paying off a substantial bridging loan until they sell their old home at auction in November.

"I am feeling anxious about this," she said.

"I keep reminding myself that I have this house which is my dream home but I feel like it has come back to bite me.

"It's just unfortunate that I bought a house on that other side of the market and now I am selling on the other side of it with interest rates going up and housing prices going down.

"I know the quality of my home is worth more.

"Six months ago my home would have sold for a significant amount and now we have to be guided by the current market and sell within that market.

"I just hope someone will buy our beautiful home and love living in it as much as we have."