Gravity may well have caught up with the "stupidity" surrounding house prices in a welcome relief for budding home buyers.
That's the view of prominent economist Chris Richardson, although he also predicts official interest rates will start rising from next year.
In the latest Deloitte Access Economics business outlook, released on Monday, Mr Richardson warns the home building boom of recent years will start to peter out, having been a key prop for the broader economy.
"The pace of home building is set to shrink further amid increasing evidence that gravity may soon start to catch up with the stupidity in housing markets," he said.
Separate new figures show over the past financial year the combined value of capital city dwellings increased by 9.6 per cent, greater than the 8.3 per cent rise over 2015/16.
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Still, the Corelogic data showed stark differences in price changes across the country.
In Sydney, prices rose 12.2 per cent over the past year, the fifth successive year in which values rose and pipped the 11.3 per cent of a year earlier.
Melbourne also recorded price gains of 13.7 per cent, the greatest increase over a financial year since 2009/10.
But on the other side of the country, Perth values fell for the third successive year for the first time in two decades, albeit easing to a decline of 1.3 per cent in 2016/17 compared to the 4.7 per cent drop in the previous year.
Such variants aside, Mr Richardson expects Australia will start raising interest rates in 2018 following the global trend set by the US.
But because of Australia's heavily indebted households, the Reserve Bank won't be increasing rates sharply.
"Australia will sit more towards the back of the queue for global interest rates normalisation," Mr Richardson said.
HSBC chief economist Paul Bloxham expects the central bank will start lifting the cash rate in the first three months of 2018.
He believes the two key factors that forced the Reserve Bank to cut the cash rate to a record low 1.5 per cent - the mining downturn and the need to keep the Australian dollar competitive in a low global interest rate environment - are both receding.
"Australia may not need a record low cash rate for much longer," he says.
However, Mr Richardson believes governor Philip Lowe and his central bank board will need to be convinced wages growth is past its trough before it starts hiking rates.
CORELOGIC CAPITAL CITY HOME VALUE CHANGES FOR 2016/17
Australia 9.6 per cent
Sydney 12.2 per cent
Melbourne 13.7 cent
Brisbane 2.0 per cent
Adelaide 2.4 per cent
Perth -1.3 per cent
Hobart 6.8 per cent
Darwin -7.0 per cent
Canberra 9.6 per cent
