The pain doesn’t look over for Australia’s big-city housing markets, with prices in Perth, Sydney and Melbourne tipped to fall further in 2019.

Despite commodity prices stabilising, Monday’s Fourth Quarter Housing Forecast Report from Corelogic and Moody’s Analystics says house values in Perth will likely decline 2.8 per cent in 2019, followed by a recovery in 2020 thanks to population growth.

CoreLogic says the median house price in Perth fell 4.7 per cent last year and now stands at $446,011, with values back to levels last seen in March 2009.

CoreLogic’s latest house values survey, released last week, showed national dwelling values fell 2.3 per cent over the December quarter — the worst quarter-on-quarter decline since 2008. Most regions of Australia recording a weaker performance as national values dropped 4.8 per cent in total in 2018.

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Monday’s forecast report said dwelling values are predicted to fall 3.3 per cent in Sydney and by as much as 6 per cent in Melbourne on the back of declines in inner-city areas.

Tighter credit conditions in 2018 saw Sydney’s housing market fall by 5.8 per cent, after a 12.8 per cent rise in 2017, while Melbourne values dropped 0.1 per cent last year.

However, Sydney’s apartment values are set for a modest recovery, following a 2.9 per cent decrease in 2018.

For the next 12 months, Moody’s predicts house values across Brisbane will gain a mild 1.2 per cent, with strength in west Brisbane and inner Brisbane offsetting declines in south Brisbane.

Adelaide’s housing market will continue its stable run with a 2.6 per cent rise in 2019.

Greater Melbourne house values are now 11 months into a correction, with the decline accelerating to a low not seen since the global financial crisis.

Last month Reserve Bank Assistant Governor Christopher Kent blamed “unnecessary” credit tightening for further threatening a market that has been on the slide since 2017.

The Organisation for Economic Co-operation and Development also said last month a burst housing bubble remains the greatest risk to the nation’s $1.3 trillion economy.

Despite an economy sailing near its full potential, Moody’s warned fading wealth effects from the entrenched cooling of the housing market would become a greater drag.

“Given that most of household wealth is in the relatively illiquid asset of housing, there would be greater systematic implications if debt repayment difficulties suddenly become a broader concern,” Ms Ell said.

“For example, if unemployment were to rise, it would force many households to sell at once.”

AAP