CoreLogic’s national home value index rose 0.7 per cent in July – ascending for the fifth consecutive month – but the monthly lift was down from 1.1 per cent growth in June and 1.2 per cent in May.

Markets are still trending up in most regions and cities but at a slower pace, with Sydney nearly halving its pace of growth since May.

CoreLogic research director Tim Lawless said the Sydney market, which had been leading the upswing, had been flooded by new listings.

“An increased flow of new listings provides more choice and may be working to reduce some of the urgency felt among prospective buyers,” he said.

Listings in the NSW capital were up 9.9 per cent compared to the same time last year and 18 per cent above the previous five-year average.

While new listings have been trending higher, overall capital city levels are still well below five-year averages.

Mr Lawless offered a couple of reasons why sellers might be more active than usual.

Sellers may have jumped on what they expected would be a slower winter period to list before spring, when stock levels tend to pick up and create more competition between vendors.

“Another possibility is that we are seeing the first signs of motivated selling as the rapid rate hiking cycle catches up with household balance sheets,” Mr Lawless said.

The housing expert expects mortgage arrears to lift through the second half of the year but believes it is unlikely to become widespread, with a relatively strong labour market likely to support most households to meet their repayments.

PropTrack senior economist Eleanor Creagh agreed some households would be under pressure, especially as they roll off low fixed-rate mortgages and onto more expensive offers.

But she told AAP many had managed to get ahead on their mortgage repayments during the pandemic and most households were employed, which would keep a lid on distressed sales.

Refinancing, which has boomed since interest rates started rising, would also provide some reprieve, Ms Creagh added.

PropTrack’s property price index, also released on Tuesday, has been climbing for seven consecutive months.

The index has nearly fully reversed its decline, lifting 2.79 per cent from its December lows.

Ms Creagh said the full impact of rate rises was yet to be felt and remained a headwind for a property market rebound.

“However, interest rates are nearing their peak, if not there already,” she said.

“This is likely to sustain confidence and maintain the lift in home prices, resulting in more markets returning to positive annual price growth.”

Lending to buy homes has been picking up in line with recovering home prices but fell one per cent in June, as measured by the Australian Bureau of Statistics.

The fall in total new loan commitment for housing followed a 5.4 per cent lift in May.

Owner-occupier lending fell 2.8 per cent over the month whereas investor activity picked up, lifting 2.6 per cent.

The bureau also recorded sustained refinancing activity as borrowers switched lenders to chase cheaper rates: it fell 3.1 per cent in June, but was still 12.6 per cent higher than a year ago.

Building approvals data revealed on the same day revealed a sharp drop off in the volatile apartment series, sinking 21 per cent.

The decline followed a 60.4 per cent jump in May.

The more reliable indicator of home-building demand, detached home approvals, fell 1.3 per cent in June after a weak 0.8 per cent rise in May.