As housing values dropped across most of the country, Canberra is one of few Australian capital cities that posted a rise last month, as restrictions ease and confidence grows.
The 2020 CoreLogic Home Value Index found the first month-on-month decline in national housing values since June last year was recorded in May.
Melbourne's housing market had the biggest fall in May, down 0.9 per cent. Sydney was down 0.4 per cent and Perth down 0.6 per cent. Nationally, there was a drop of 0.4 per cent.
Canberra recorded a rise of 0.5 per cent, one of three capital cities to post a positive outcome. Adelaide's home value increased by 0.4 per cent and Hobart's by 0.8 per cent.
Stay at home rules began to ease throughout much of the country in the last month, as open homes and inspections were allowed to go ahead in person with a limit on people.
CoreLogic head of research Tim Lawless said as restrictions continue to ease the impact to housing values could be better than first expected.
"Considering the weak economic conditions ... a fall of less than half a percent in housing values over the month shows the market has remained resilient," he said.
"Although home values haven't materially fallen, buying and selling activity has been significantly impacted. In May, the sharp falls in both listing numbers and buyer activity are starting to reverse."
Sales activity made a comeback through May, up 18.5 per cent after a 33 per cent drop in April, although it remains below average.
Mr Lawless said regions had been particularly resilient to a dip in housing value, although the future was uncertain. In regional NSW, home values declined by 0.1 per cent last month.
"Eventually government stimulus will wind back and borrower repayment holidays will expire. In the absence of these policies, housing values could come under some additional downwards pressure if economic conditions haven't picked up towards the end of the year," he said.
As the country rolls back restrictions consumer confidence has increased, leading to eight per cent more property listings in May than April. Mr Lawless said listing numbers were set to rise throughout winter.
"With consumers feeling more confident, households are better equipped to make high commitment decisions such as buying or selling a home. A lift in housing market activity should also support broader economic activity, with housing turnover providing positive flow-on effects to other sectors including retail, construction and banking," Mr Lawless said.
As policies preventing open homes and on-site auctions eased during May, there was a clear improvement across auction markets.
"We have seen a sharp reduction in the number of auctions being withdrawn, and more vendors are testing the market under auction conditions rather than accepting an offer prior to the auction," Mr Lawless said.
He said rents were steady throughout May across the country, but inner-city apartment rent would be impacted by stalled migration and international student arrivals.
"Inner city unit rents are likely to fall more substantially than other sectors of the market," he said.
Mr Lawless expected job losses across sectors with a large number of renters such as hospitality, tourism and arts would impact on rental demand.
"The double whammy of higher supply and less rental demand, especially across unit markets, is likely to place further downwards pressure on yields. In Sydney gross rental yields are already around record lows and Melbourne isn't far behind."