Australia's home value index fell 0.9% in August, marking its fifth consecutive monthly decline and leaving national home values 3.6% below the March peak, as the housing downturn deepened through winter and declines spread across 93% of capital city suburbs, Cotality said in a Tuesday report.

Sydney led the decline, with home values falling 1.4% in August, followed by Melbourne and Canberra at 1.1% each, Brisbane at 1%, and Adelaide and Perth at 0.8%.

"The combination of a sharp drop in demand and higher than average advertised stock levels is weighing more heavily on Australia's largest housing market," said Tim Lawless, Cotality's research director.

The downturn was becoming more broad-based, with lower-priced housing also weakening as affordability pressures and softer demand spread across the market, per the report.

Regional values declined 0.4% in August and 1.2% over winter, with regional South Australia the only major market to record growth.

Weaker buyer demand is also weighing on activity, with estimated sales falling nearly 16% year-on-year and 12% below the five-year average, while Sydney, Brisbane and Perth each recorded declines of more than 20%.

Capital city listings were 24% higher than a year ago despite a 6% decline in new listings, signaling slower market absorption, while longer selling times, greater vendor discounting and low auction clearance rates are increasingly favoring buyers.