New figures indicate house prices in some parts of the Hunter increased during March for the first time in 10 months.
The median house price in Newcastle and Lake Macquarie is now $822,693, up 0.6% between February and March.
CoreLogic's Research Director Tim Lawless, says the figures are sure to field mixed reactions across the region.
"For current homeowners, they'll probably see this as good news; the fact that they're no longer seeing housing values fall or removing some of their wealth from their home," he said.
"For those people looking to buy into the marketplace, they're probably looking for values to fall further. We know affordability is still quite a challenge in the region, despite the fact that housing values have come down."
Mr Lawless said there are a number of things contributing to the shift, naming low stock, the state's rental crisis, and overseas migration as just a few.
"One of the major factors at play is simply that there's not much stock in the marketplace; listing numbers across region remain well below average," he said.
"We're also starting to see some spill-over coming out of the rental market as well; rental vacancy rates are still around 1% if not lower that that."
"Of course with migration from overseas really ramping up, arguably, a lot of overseas migrants simply can't find rental accommodation and may be moving into a purchasing decision a lot more quickly than typical migration trends would flow into housing demand."
There are concerns the rental crisis could worsen, with a new report predicting Australia will be short of more than 100,000 homes over the next 5 years.
