Real estate values could soar next year in suburbs hardest hit by Australia's worst property downturn on record.

Credit ratings agency Moody's Analytics is forecasting strong growth in parts of western Sydney which last year suffered double-digit price falls.

While the carnage is expected to continue in 2019 with an election looming, Sydney and Perth, in particular, are expected to rebound in 2020 from a slump sparked by a crackdown on investor loans.

Real estate values are expected to soar next year in suburbs hardest hit by Australia's worst property downturn on record (pictured is Gladesville in Sydney's north)

Moody's is expecting house values at Baulkham Hills (house pictured), in north-west Sydney, to surge by 7.8 per cent in 2020, following a 10.8 per cent slump last year

Moody's is expecting house values at Baulkham Hills, in north-west Sydney, to surge by 7.4 per cent in 2020, even though it was Australia's fifth worst performing metropolitan market in 2018, with values slumping by 10.8 per cent.

It was also upbeat about Blacktown, in Sydney's west, predicting house price growth of 8.3 per cent next year, in an area where values last year plummeted by 9.1 per cent.

Parramatta, also in the western suburbs, was forecast to see house prices climb by 6.2 per cent, following a 10.7 per cent property slump in 2018.

Ryde, in Sydney's north, was tipped to house price growth of 3.5 per cent in 2020, a modest turnaround from 13.3 per cent slump suffered last year.

It was also upbeat about Blacktown, in Sydney's west, predicting house price growth of 8.3 per cent next year, in an area where values last year plummeted by 9.1 per cent

Since peaking in July 2017, Sydney house prices have plummeted by a record 11.1 per cent, real estate data group CoreLogic revealed last week.

Suburbs tipped to surge in 2020 Central Coast, NSW* - 13.8% (following 8.8% increase in 2019) Mackay-Whitsunday, Queensland - 10.5% (following 3.7% in 2019) Bendigo, Victoria - 10.2% (following 5.4% climb in 2019) Geelong, Victoria - 10.1% (following 7.2% rise in 2019) Blacktown, Sydney's west - 8.3% (following a 0.2% rise in 2019) Mandurah, WA - 7.8% (following 2.4% decline in 2019) Baulkham Hills, Sydney's north-west - 7.4% (following 2.6% fall in 2019) Parramatta, Sydney's west - 6.2% (following 2.7% drop in 2019) Source: Moody's Analytics * Apartments Advertisement

This was worst than the 9.6 per cent plunge which occurred between 1989 and 1991, in an era when interest rates hit 19 per cent.

The Australian Prudential Regulation Authority's crackdown on investor loans has hit the Sydney and Melbourne markets particularly hard, and prolonged the slump in Perth.

While most of Sydney, apart from the north shore and the eastern suburbs, were expected to recover in 2020, Moody's Analytics was lukewarm about Melbourne, where house prices plunged by 9.1 per cent in 2018.

Melbourne's upmarket inner-east was Australia's worst metropolitan housing market last year, with values tumbling by 13.4 per cent.

Moody's expected the carnage to continue, with an 11.2 per cent plunge in 2019 followed by a modest 3.6 per cent recovery in 2020.

Geelong, south-west of Melbourne, has so far weathered the property market downturn, last year enjoying real estate increases of 8.2 per cent.

Moody's expected the good times there to continue, forecasting growth of 7.2 per cent in 2019 following by 10.1 per cent in 2020.

Moody's expected the good times in Geelong (house pictured) to continue, forecasting growth of 7.2 per cent in 2019 following by 10.1 per cent in 2020

Farther west, Bendigo was expected to enjoy a 10.2 per cent increase in property values next year, building on a 5.4 per cent climb in 2019.

Australia's least desired suburbs in 2018 Melbourne's inner-east, down 13.4% Ryde, Sydney's north, down 13.3% Sydney's inner south-west, down 10.9% Sutherland, Sydney's south, down 10.9% Hawkesbury and Baulkham Hills, Sydney's north-west, down 10.8% Parramatta, Sydney's west, down 10.7% Melbourne's inner-south, down 10.5% Sydney's south-west, down 9.3% Blacktown, Sydney's west, down 9.1% Sydney's inner-west, down 8.8% Source: CoreLogic median house and apartment values in 2018 Advertisement

It was also upbeat about Perth and surrounding cities, following a 4.3 per cent slump last year in the West Australian capital.

Mandurah, south of Perth, was tipped to enjoy a 7.8 per cent increase in property prices in 2020, following a 2.4 per cent dive in 2019.

The New South Wales central coast, north of Sydney, was tipped to be Australia's best performing market in 2020, at least when it came to apartments.

Moody's Analytics forecast a 13.8 per cent increase in unit values next year, following an 8.8 per cent increase in 2019 in an area which has been immune to Sydney's dowturn, despite being only a one-hour drive away.

The Mackay and Whitsunday region in north Queensland was also expected to enjoy double digit property price growth in 2020, with a 10.5 per cent increase predicted, following a 3.7 per cent rise this year.

It was less upbeat about Hobart, which was last year Australia's best performing capital city market with prices increasing by 8.7 per cent.

Moody's predicted growth in the Tasmanian capital would slow to 2.7 per cent in 2019 and fall by two per cent in 2020.

'Hobart’s housing market is likely at the end of its bull run,' it said.