Newcastle residential property prices drifted higher in January, though at a far slower rate than in the last quarter of 2019.
The median price of a house or unit in the Newcastle and Lake Macquarie local government areas rose by 0.2 per cent in January, according to data from property analysts CoreLogic.
Prices began heading north in spring last year, climbing 3.7 per cent in three months after losing about a tenth of their value in the preceding year.
The latest 0.2 monthly rise follows a 0.9 jump in December.
Outside Newcastle, prices fell 0.2 per cent in the Hunter in January after a 0.7 per cent rise in December and 1.7 per cent recovery in the last quarter of 2019.
The Newcastle growth rate in January was well below the Sydney (1.2 per cent), Melbourne (1.1 per cent) and national (0.9 per cent) figures.
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Newcastle prices still need to climb another 4.5 per cent to recover the ground lost during the housing downturn.
CoreLogic analyst Tim Lawless said seasonal factors made January a "hard month to read" the housing market, but there was enough evidence to suggest growth rates were tapering in Sydney and Melbourne.
"Although, with values rising at more than one per cent month on month, this pace is still unsustainable considering household income growth is sluggish and housing affordability challenges are worsening," he said.
Meanwhile, the Property Council of Australia's latest Office Market Report shows the vacancy rate for A-grade office space in Newcastle was just 0.4 per cent in January, down from 1.9 per cent a year earlier.
The overall vacancy rate fell slightly to 7.2 per cent in the year to January.
The vacancy rate was higher than in Melbourne's central business district (3.2 per cent), Sydney's CBD (3.9 per cent) and Hobart (4.1 per cent) but lower than in other capital cities.
Brisbane (12.7 per cent), Perth (17.6), Adelaide (14), Canberra (10.3) and Darwin (16.8) all had higher proportions of empty offices.
"Newcastle has a strong office market with a growing population and local economic growth," the Property Council's Hunter director, Anita Hugo, said.
"Over the period measured, 11,900 square metres of space was added, showing there is still a strong supply pipeline."
She said another 15,000 square metres of space was due to open in 2020 and 8200 square metres in 2021.
Ms Hugo said the fall in vacant A-grade space supported more investment.
