A surge in home listings is giving buyers the upper hand across Newcastle and Maitland as property values trend downward.
According to Cotality's latest Regional Market Update report, the total number of homes listed for sale in the region has increased by 18.8 per cent compared with one year ago.
Stock levels are also 10.8 per cent above the region's five-year average, with 2460 active listings.
"That rise in listing numbers speaks to the current way in which supply and demand has shifted over the last few months," Cotality's head of research Gerard Burg said.
"It points to the idea that demand has pulled back quite rapidly, and that has led to an accumulation of stock on the market which always provides downward pressure on values.
"Buyers have more time to consider their options, there's less competition, and there is also the opportunity to negotiate and get a better deal."
With stock levels rising, short-term value growth has lost momentum.
According to the report, home values in Newcastle-Maitland fell 1.3 per cent over the three months to July 2026.
The region's median home value sits at $964,568.
Meanwhile, Nelson Bay recorded one of the steepest quarterly falls in regional NSW alongside Coffs Harbour and Goulburn, with home values declining three per cent over the quarter.
The median home value in Nelson Bay is $1,020,714 and listing numbers are 16 per cent higher compared with one year ago.
Mr Burg said the drop in values is in line with broader trends seen in other lifestyle markets across the country.
"We have tended to see that a lot of those lifestyle markets have been a bit weaker," he said.
"If you look around the rest of the state, Coffs Harbour was down by a similar margin and Ballina was down three per cent, so those coastal lifestyle markets seem to have been hit a little bit harder."
While lifestyle areas like Nelson Bay are experiencing sharper short-term declines, home values across the region remain vastly higher than five years ago.
In Newcastle-Maitland, home values are up 8.9 per cent over the past year and 32.7 per cent over five years.
Nelson Bay home values rose 5.9 per cent over the past year and are up 31.6 per cent since 2021.
Mr Burg said the latest data reflects a market normalisation rather than a collapse.
"This is just a stage of the cycle and we're now going into this downturn," he said.
"We have signalled the mid-next year is when we might start to see a turnaround once again, but it is a normal part of what we have seen before.
"In the past 40 years - and this is looking at the combined capital cities rather than regional markets - there have been 10 downturns, so it is very much a normal part of the market."
While home values are falling, rental growth in Newcastle-Maitland remains resilient, climbing 0.7 per cent over the quarter to a median of $722 per week.
Overall, rent values have increased 5.6 per cent over the year.
According to the report, vacancy rates remain tight at 1.6 per cent in Newcastle-Maitland.
Nationally, regional Australia's housing market continued to outperform the capital cities, despite value growth in almost every major regional market slowing or declining in the past three months.
The report shows regional dwelling values fell by just 0.1 per cent over the quarter, compared with a 2.5 per cent decline across the combined capital cities.
Mr Burg said even though regional markets such as Newcastle-Maitland continue to outperform the capitals, they are not immune to the broader slowdown.
"It was a slighter weaker performance in Newcastle-Maitland than the broader rest of NSW category, but not outstandingly slow," he said.
"That spillover demand coming out of Sydney and into the regions has provided a bit of support to home values."
