Home prices have begun to fall in parts of Sydney following a dramatic rise in listings and a drop in demand as would-be buyers give up hope of an early rate cut.

It comes as PropTrack’s latest Home Price Index released Tuesday showed prices across Greater Sydney as a whole inched up an average of 0.01 per cent over September.

This pushed the median price of a dwelling, based on sales of units, townhouses and houses, to $1,103,000 – about 5.9 per cent higher than a year ago.

September growth was slower than the month prior when prices rose by about 0.32 per cent, but there was also a wide variance in price movements across Sydney regions. Most outer city areas, along with the eastern suburbs, recorded strong growth, while prices fell back within inner areas.

Dwelling prices in Sydney’s CBD and inner south are now an average of about 0.64 per cent lower than they were three months ago, while inner west prices dropped 0.16 per cent over the same quarter.

Housing experts said both regions had a surplus of high-density apartment stock because of a recent increase in investors selling units.

SQM Research director Louis Christopher said many investors were struggling to keep their properties because of higher repayments on both their investments and their residences. “The family home is usually the last thing people sell when they’re struggling,” he said. “It’s more likely that they sell their investments first and we’re seeing a lot of that.”

Mr Christopher added that Sydney had become a “buyer’s market” and he expected it to favour buyers until the Reserve Bank decided to cut interest rates.

PropTrack economist Eleanor Creagh said an increase in listings was taking some heat out of the market.

“The number of homes listed for sale has lifted providing more choice and slowing price growth,” she said.

“Though prices are rising, sustained high interest rates, cost of living pressures, weak consumer sentiment and affordability constraints are weighing.

“Buyers now have more properties to choose from, though uncertainty around the timing of interest rate cuts is likely also having an impact on the pace of growth.” PropTrack indicated the southwest, including areas such as Liverpool and Fairfield, had the largest price rise at 1.61 per cent over the last three months.

Eastern suburbs prices jumped up 1.12 per cent over the same period, while the outer west and Blue Mountains had growth of just shy of 1 per cent.

Other higher growth markets over the period were The Central Coast (0.67 per cent), northern beaches (0.64 per cent), Sutherland (0.6 per cent) and the outer southwest (0.53 per cent).

It comes as agents reported more subdued activity at weekend auctions, with about two thirds of the homes scheduled for auction selling – although many were through pre-auction deals.

One auctioneer told The Daily Telegraph that buyers were increasingly “picky” and wouldn’t move on properties unless they were “top tier” listings. National home prices rose 0.04 per cent over September and are now 5.67 per cent higher than a year ago.

Adelaide (+0.53 per cent), Perth (+0.24 per cent), and Brisbane (+0.20 per cent) recorded the strongest growth in September, while Hobart (-0.31 per cent) and Melbourne (-0.30 per cent) were the only capitals to see prices fall over the month.