On Friday Westpac economists forecast property prices could fall 14% from late 2022 through 2024.
This is more bearish than major bank counterparts NAB and CBA, both forecasting 10% price falls through 2023.
The bank with the most recent tip, Westpac, said the outlook on interest rates was a major driver of the negative forecasts.
Earlier in the year, bank economists forecast the RBA to start hiking the cash rate from August - it also raised its expectation for the 'terminal' cash rate to sit at 1.75% in 2024.
This implies one 15 basis point hike, followed by six 'regular' 25 basis point hikes.
Making money 'more expensive' is one lever the RBA can pull to keep inflation under control.
"Housing will be ‘collateral’ damage in the RBA’s efforts to keep inflation on target over the medium term," Westpac economists said.
"Two thirds of consumers now expect mortgage interest rates to rise over the next 12 months, up from 55% in January and the highest since 2011."
Late last year, the prudential regulator increased the mortgage serviceability buffer, estimated to affect the average home buyer's borrowing power by 5%.
This is just the start of the 'tightening cycle' according to Westpac economists.
"Prices at the end of 2024 will be on a par with their level in April last year," they said.
"By the end of 2024 the mix of lower prices and higher incomes will have more than offset the effect of higher rates restoring affordability to more normal levels for most markets.
"Housing markets will need to adjust to the prospect that, in the absence of some major shock like Covid or the GFC, rates are unlikely to ease in the foreseeable future."
From April 2020 to June 2021, Westpac forecast a 5% housing market dip, but in that time prices appreciated 15% nationally.
'Lemon suckers'
Propertyology's head of research Simon Pressley has long been critical of big banks' property price forecasts.
"Property predictions from banks and economists have gone from being laughable to embarrassing," Mr Pressley told Savings.com.au.
"They obsess over one or two negative factors that act as a drag on market performance. There are dragging factors on markets every single year.
"Damn lemon suckers."
Instead, Mr Pressley pointed to the positive-growth forces in the property market, including high savings buffers, large offset account balances, the economy nearing full employment, and low housing supply.
The average Australian mortgagee is also four years ahead on their home loan.
"The RBA has been crystal clear that sustained wage growth will occur before interest rates rise," Mr Pressley said.
"Interest rate rises are inevitable, but they need to increase five-times just to get back to where they were three-years ago. Mortgage holders coped fine then and they will again now."
"There is over $100 billion cash in mortgage offsets and redraw accounts."
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