House price fall of 5pc tipped for next year

However, the bank's economists say most of the recent house price boom has been justified, mainly by a big migration boom. House prices rose about 22 per cent in the year to March.

"A boom, yes, a bubble ready to crash...not likely," Westpac Bank economists say.

On average, the housing market is 10 per cent "above fundamental valuation", the bank says in a report just out. That is a bigger "over-valuation" than at any time in the past 20 years, but there was no evidence of a bubble.

Prices would keep rising this year, by about 5 per cent, but then fall as much next year, before moving sideways.

"You may be able to pick up a property cheaper next year," the report says.

A recent report in The Economist magazine suggested there could be an across-the-board fall of as much as 15 per cent, though most bank economists favour a smaller dip – some say 5 per cent or 10 per cent at most.

Read More - Opens in a new window