Property prices are tipped to fall between eight and 11 per cent from their March peak and will only start to recover by September 2027, a survey of 384 real estate experts has found.
That means dwelling prices are only about halfway through a tailspin that has wiped away 5.2 per cent of their value since March, according to property data firm Cotality.
For Sydney and Melbourne, an 11 per cent dip would pull property prices down to levels not seen since as early as February 2021.
Australia scored 4.3 out of 10 on the Australian Property Institute's index of property market strength in the three months to September 30.
This puts it on the weak side of the ledger, which the organisation warns "warrants a degree of caution".
Victoria, NSW and Queensland fared poorest, scoring below five and Victoria bringing up the rear with a woeful 3.7.
"Confidence is basically holding back market activity at the moment," institute research head Sherman Chan told AAP.
"People are worried about more interest rate hikes on the horizon, and they are after greater clarity."
Higher interest rates were the property sages' most feared bogeymen, followed by inflation and then the roll-back of tax concessions for property investors.
The cash rate was hitched up to a 15-year high of 4.6 per cent at the Reserve Bank's September 29 meeting, which governor Michele Bullock flagged may well be followed by more rises before the year is out.
The bank has made plain it is now willing to sacrifice jobs and ignore plummeting house prices to keep a lid on inflation, which an International Monetary Fund outlook on Tuesday forecast would stay above the RBA's two-to-three per cent target until the end of 2027.
The Middle East conflict, AI boom and well above-average temperatures caused by a super El Nino climate pattern are jacking up the prices of oil, technology and agricultural products - patterns without a clear sunset and largely beyond Canberra's ability to tame.
But Dr Chan said the downturn could not be explained by interest rate anxiety alone, adding there would have been more hope for the market if Labor had ironed out and communicated the May budget's tax changes sooner.
"There's a lot of wait and see," she said.
"High inflation and cost-of-living concerns ... doesn't really justify the slump that we are seeing.
"It is really about the lack of clarity about the policy changes that's holding people back."
Negative gearing will be limited to new builds, and real capital gains taxed at a 30 per cent minimum from July 2027, the same month API thinks a recovery could begin.
But that could come sooner if the government managed to clue in home buyers about the changes before they entered force, according to Dr Chan.
"I won't rule that out," she said.
"Some are even optimistic enough to think that it will rebound in the start of 2027, and some are more pessimistic, thinking that it will drag into 2028 - what we present is that medium perspective."
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