Australian property could be in for a rough few years. Source: News Limited

It just might not be for another year or two.

Or at least three if you’re looking to buy in Brisbane.

But the surging prices of Sydney and Melbourne have been tipped to come to an end across the coming three years by respected market research group BIS Shrapnel.

In the Residential Property Prospects 2015-2018 report released by the group today prices have been tipped to take a hit in Melbourne and Sydney, two of the nation’s strongest property markets, within that period.

Report author and BIS Shrapnek senior manager Angie Zigomanis said it would take a little while for the markets to change gear, however.

“Beyond the next 12 months there may be more of an opportunity for buyers to come back in for housing and in some areas of the unit market I suspect buyers have already got the upper hand,” Mr Zigomanis said.

“It will be more of the same for the next 12 months, but things start to slow beyond that.

“It’s a regular function of the market, it’s economics 101. Market booms, people jump in and start building and market gets oversupplied and corrects.”

Just one city will avoid the crash in property prices. Source: Supplied

And with the exception of Brisbane, buyers are also likely to be in the better position around the rest of the nation’s capitals.

Apartments are likely to be worst hit with those currently buying into off-the-plan developments in hot spots like Melbourne potentially facing a double-blow as they pay at the peak of the market today with the likelihood of getting the keys to the property after the market softens.

“The risk with units is that you have investors buying today in this market, but they will come online in a few years once the building is completed and they may be having to discount rents to find tenants,” Mr Zigomanis said.

The report points to overseas migration having tumbled from 237,500 in the financial year of 2012-2013 to just 184,000 across 2014, at a time when new dwelling construction is expected to hit a record level of 210,000 new commencements.

There are another 200,000 developments expected to start in the 2015-2016 financial year.

“In general there’s an under supply at the moment and that’s something that has to be eaten away at first,” Mr Zigomanis said.

“But the 210,000 are just being started and so two or three years away, and that’s where we see a reduction in prices coming through.”

Mr Zigomanis said it was the beginning of the end for those looking for “big gains in property” and that the “boom mantra of the last few years will be going away”.

“We expect prices will be pretty soft or fall in some cities,” he said.

Real Estate Buyers Agents Association of Australia president Jacque Parker said she would not be surprised to see home values in Melbourne and Sydney contract in the coming years, and noted any slowing of those markets would be welcome news to those looking to buy.

“Sydney and Melbourne sellers have had the upper hand in the last 2.5 years,” Ms Parker said.

“It is good for buyers in that they aren’t going to be chasing a rising market and there may be more time for thinking through a purchase of a property.”

She added that at any time when a market might be on the cusp of a change of direction that it was important to do your homework as a homebuyer.

However, the Real Estate Institute of Australia argued there were no economic factors facing Australia that were likely to change the status quo.

REIA president Neville Sanders said outside of Melbourne and Sydney the nation’s property markets were fairly stable. Something he anticipated to continue.

“There aren’t any major factors likely to push that up or down,” Mr Sanders said.

“The feedback I am getting from each of the states and territories in the main is they are expecting stability.

“The worst property cycles have had high interest rates and high unemployment, and those drivers ... aren’t there.”

Here’s what BIS Shrapnel are expecting for your corner of the country.

SYDNEY

Sydney’s property market could be in for a contraction in the next three years. Source: Getty Images

Sydney price growth is tipped to slow over the next 12 months as affordability is pushed to the limit.

A lack of supply and investor demand are being tipped to carry the city to 7 per cent growth across the next financial year.

“The supply side of the equation will still have an impact in Sydney, though the increase in construction is starting to see some of these pressures alleviated,” Mr Zigomanis said.

That alleviation is expected to lead to a fall in values of 4 per cent across the following two financial years, ending in June 2018. For the full three years, growth will top out at 2 per cent.

But once adjusted for inflation the BIS Shrapnel report argues it will see a 6 per cent decline in real terms.

MELBOURNE

Melbourne’s city apartment scene could be at the centre of falling median prices in the near future. Picture: Mark Stewart Source: News Corp Australia

Strong migration, including unprecedented levels of migration from other states, has helped underpin strong growth in prices in Melbourne in recent years.

“The interesting thing coming out of Melbourne is that Victoria is actually the strongest of all the states for in flowing state migration,” Mr Zigomanis said.

That will help over the next three years, but among houses is only tipped to account for 4 per cent growth from June 2015 to June 2018. A 5 per cent rise over the coming 12 months will be followed by contractions in both of the following two years.

In real terms, the tip is a 4 per cent fall anticipated over the period.

Which is better than what is on the cards for units, where a 12 per cent slide in the median price in real terms is anticipated.

FURTHER READING: Negative gearing crackdown looms for foreign investors

BRISBANE

Brisbane is set to remain the last market standing for property price growth in the coming three years. Source: ThinkStock

“In real terms, Brisbane prices are still below where they were five years ago, so we still think that market is pretty affordable at the moment,” Mr Zigomanis said.

That comparable affordability is expected to put it at the top of the nations property ladder over the next three years with house prices there tipped to lift 13 per cent across the period.

The Gold Coast and Sunshine Coast have a similar forecast, 13 per cent and 12 per cent respectively. Meanwhile Townsville is on track for a 3 per cent lift across the coming three years and Cairns for an 11 per cent lift.

ADELAIDE

Adelaide has a mixed future. Picture by Matt Turner. Source: News Corp Australia

A lift in new home construction off the back of first homebuyer incentives is thought to have pushed supply too high in Adelaide.

“This rise in construction is coinciding with slowing underlying demand as net overseas migration inflows ease,” Mr Zigomanis said.

“With the state continuing to face headwinds in a number of industry sectors, there will be little to place upward pressure on prices apart from low interest rates.”

In real terms Adelaide is tipped to see both houses and units median prices drop 7 per cent across the next three years, on the BIS Shrapnel forecast.

PERTH

Perth is likely to have a sluggish few years as changes work through the resource-sector. Source: News Corp Australia

A parring back of mining and resource sector activity and investment are anticipated to lead the way for a similar reduction in home values around Perth.

The city has already seen median house prices decline in the past 12 months, and is likely to see the trend continue.

In inflation-adjusted terms a decline of 10 per cent is tipped across the coming three years.

But the end of that period is tipped to be when the market balances out.

HOBART

Hobart may benefit from interstate interest. Photo: Linda Larsen Source: Supplied

The Tasmanian capital is another market expected to suffer from an oversupply of property thanks in part to first homebuyer grants for new homes.

However, there may be a positive light on the horizon.

“Given the recent and prospective growth in Sydney and Melbourne, there is potential upside to underlying demand if the state experiences a net interstate migration inflow, similar to the early 200s when interstate arrivals — largely ‘tree change’ migrants from the mainland — increasingly took advantage of price gains to sell their main homes to downshift to Tasmania,” Mr Zigomanis said.

Over the coming three years a 4 per cent anticipated growth is likely to be realised as a decline to the same figure in real terms. Unit medians are expected to fall 10 per cent in real terms.

CANBERRA

High wages across the city of Canberra are expected to help mitigate a rising number of new properties in its property market. Source: istock

An expected long-term oversupply puts Canberra in a position where a relatively flat market is anticipated. Though a 5 per cent decline in values is considered likely once corrected for inflation.

“Canberra has the highest incomes of the capital cities and affordability is not as strained as in other cities, which should therefore also prevent any major price declines,” Mr Zigomanis said.

Units are not expected to be insulated by this, however, with a real terms reduction of 10 per cent on the cards, according to BIS Shrapnel.

DARWIN

Darwin could have a rough few years ahead for home prices. Source: News Corp Australia

Investment in the resource sector is believed to have peaked in the NT, according to the report.

At the same time, new dwelling numbers have also risen, following a rise in population driven by the resources economy.

As investment into the large Icthys project comes to an end median house prices are tipped to suffer.

“The median house price (is) forecast to decline by a total of 2 per cent in the three years to June 2018, which will result in a real house price decline of 10 per cent over the period,” Mr Zigomanis said.

Units are faced with a 12 per cent decline in real terms.

With many Australians finding it increasingly difficult to buy a home, we take a look at how affordable housing really is.