ANZ Bank has warned the pace of decline in Australia's house prices is "quite a bit larger" than expected, and likely to last longer than it previously forecast.

With national auction clearance rates at a five-year low, ANZ senior economist Daniel Gradwell predicted in a research note published on Wednesday that further weakness was in store for the housing market, before it would start stabilising later this year.

Mr Gradwell pointed to recent figures showing that the rate of price decline had accelerated in Sydney. The weakness was also affecting Melbourne amid a slump in national auction clearance rates and a tightening in credit availability.

Mr Gradwell said the bank had previously expected the market would have "stabilised" by now, based on higher auction clearance rates at the start of this year. It had expected prices would finish 2018 slightly higher in annual terms.

But ANZ is now revising these forecasts. The national auction clearance rate has fallen from 66 per cent in February to 58 per cent in May, the lowest since early 2013. This suggested "further pressure in the near term," Mr Gradwell said.