SYDNEY (REUTERS) - Sydney's property downturn accelerated in November, propelling nationwide house prices to the biggest monthly drop since the global financial crisis, as credit curbs and buyer nerves continue to bite.

Nationwide home values fell 0.7 per cent last month, led by a 1.4 per cent drop in Sydney and 1 per cent in Melbourne, according to CoreLogic Inc data released on Monday (Dec 3).

The drop takes the total decline in Sydney since the July 2017 peak to 9.5 per cent, on the cusp of overtaking the 9.6 per cent top-to-bottom decline recorded during the last recession 27 years ago. This decline is even steeper than the 1989-91 fall, showing how quickly sentiment has flipped.

November is usually the start of the peak selling season in Australia, so the deepening downturn points to continued weakness ahead.

However, because of the huge run-up in prices during the boom, property values have only fallen back to 2016 levels nationally, meaning few home owners are underwater.

A tightening of credit is the biggest factor weighing on the market, with banks winding back riskier lending - making it harder for investors - and becoming more stringent on verifying income and expenses, thus reducing the amount people can borrow.

With prospects for capital growth dim, credit more expensive and curbs on tax breaks looming if Labor wins next year's federal election, there's little sign investors will wade back into the market. That's good news for first-time buyers, who had feared they'd missed out on the great Australian dream of home ownership.