FIVE months. That’s how long before house prices start to fall, according to the latest major investment bank to call the peak in Australia’s housing cycle.

“Credit growth, auction clearance rates, house prices, settlement volumes and the dollar value of settlements are all showing signs of slowing, albeit from lofty levels,” analysts from investment bank Macquarie said in a note today, The Australian reports.

“Our economics team are forecasting quarter-on-quarter house prices to fall from the March 2016 quarter before beginning to recover from June 2017, with a 7.5 per cent fall from peak to trough.”

It said the issue was easing population growth just as housing supply surged well above trend, raising the risk of “rapid adjustment”.

Credit Suisse has also warned about the deterioration in buying conditions, particularly in NSW. “Macro-prudential tightening, out-of-cycle rate hikes on investor mortgages, and weakness in Chinese buying are having a clear impact on sentiment and demand,” it said.

It came after both the ANZ and Commonwealth Bank indicated a tightening of lending to property developers due to oversupply fears as the market cools.