There's nothing unusual about the current fall in house prices — it's the third time in the past decade.

This week in finance: Retail sales (Friday) Trade balance (Thursday)

Retail sales (Friday) Trade balance (Thursday) RBA rates meeting (Tuesday)

RBA rates meeting (Tuesday) Bank of Queensland FY results (Thursday)

However as ANZ's head of Australian economics, David Plank, points out, it is unusual that it hasn't been higher interest rates putting the brake on things.

Indeed, house prices started rolling over early last year, while mortgage rates have barely moved in that time.

In the 2009 slump, average mortgage rates peaked at well over 9 per cent. In 2012 they nearly reached 8 per cent — the graph below inverts the mortgage rate to align them with house prices.

Mortgage rates for the time being have de-coupled from house prices. ( Suppled: ANZ Research )

House price have further to fall: ANZ

The ANZ sees prices falling through this year and next before stabilising in 2020.

"Across the capital cities we see Sydney and Melbourne facing the greatest drops across 2018 and 2019 — in the order of 10 per cent," Mr Plank said.

Mr Plank sees the current fall in residential property prices as a result of a steadily evolving credit crunch.

It started as a macro-prudential twist of the thumbscrews applied by the Australian Prudential Regulation Authority to the banks, who then put the squeeze on investors.

The banking royal commission's investigation of lax, and sometimes straight-out-fraudulent lending has tightened housing credit further.

"This impacts Sydney and Melbourne the most, given their stretched affordability and leverage metrics and their greater number of investors," Mr Plank said.

The other interesting phenomenon is the average size of first-home buyers' mortgages continues to rise despite the tougher lending conditions being applied.

The average size of first home buyers mortgages is rising while investors are getting smaller loans. ( Supplied: ANZ )

So why are first home buyers borrowing more?

However, as the Reserve Bank has noted, most households don't tend to max out their home loans. The current data supports this idea.

"While there has been a small reduction in the average owner-occupied loan size in the past few months, the average loan size for first home buyers is growing," Mr Plank said.

"Given that first home buyers are likely to have less equity than upgraders, the fact that their loan size is still growing highlights that the credit tightening is very focused on investors."

If the reduction in borrowing capacity is targeting investors, rather than broadly across the market and all borrowers, the doomsday scenarios of a massive property price crash being currently floated may be well off the money.

First home buyers are likely to keep stepping in the void created by investors and at least partially fill the gap, slowing the rate of the price fall.

Markets lack direction

Wall Street had an up-and-down week, mostly down, and ended flat on Friday's session.

European stocks were more decisive — they fell on the back of a larger-then-expected deficit underpinning the new government's budget.

The ASX was one of the better-performing markets for the week, despite gaining just 0.2 per cent. Futures trading points to a payback on Monday.

Oil rose again as US President Donald Trump's supply-throttling sanctions against Iran appeared to have a greater impact than his tweets demanding a lower price.

Markets on Friday's close: ASX SPI 200 futures -0.4pc at 6,171 ASX 200 (Friday's close) +0.4pc at 6,208

ASX SPI 200 futures -0.4pc at 6,171 ASX 200 (Friday's close) +0.4pc at 6,208 AUD: 72.3 US cents, 62.3 euro cents, 55.5 British pence, 82.1 Japanese yen, $NZ1.09

AUD: 72.3 US cents, 62.3 euro cents, 55.5 British pence, 82.1 Japanese yen, $NZ1.09 US: Dow Jones +0.1pc at 26,458 S&P500 flat at 2,913 NASDAQ flat at 8,046

US: Dow Jones +0.1pc at 26,458 S&P500 flat at 2,913 NASDAQ flat at 8,046 Europe: FTSE -0.5pc at 7,510 DAX -1.5pc at 12,247 EuroStoxx50 -1.5pc at 3,399

Europe: FTSE -0.5pc at 7,510 DAX -1.5pc at 12,247 EuroStoxx50 -1.5pc at 3,399 Commodities: Brent oil +1.2pc at $US82.69/barrel, Gold +0.8pc at $US1192/ounce, Iron ore $US69.70/tonne

RBA on hold, retail going nowhere too

After a couple of lean weeks, the diary makes for a more interesting time coming up.

That said, the RBA meeting on Tuesday will be the same old story — a hold at 1.5 per cent for the umpteenth time. Is anyone still keeping count?

However, the commentary may be a bit brighter after stronger-than-expected second-quarter growth and some key employment figures hinting conditions could be about to improve on the wages front, but don't hold your breath.

CoreData's home price index (Monday) should confirm the 12th consecutive month of falling property prices.

Building approvals (Wednesday) tend to be volatile. They fell 5 per cent in July and the consensus call is another, more-modest retreat.

While monthly numbers are tricky to pick, the overall trend is lower, albeit off high levels of activity.

The exporters are likely to continue their rollicking good time with August likely to produce the 8th straight trade surplus this year (Thursday).

The most important figures for the week are likely to be retail sales (Friday).

Sales growth was non-existent in July. There's unlikely to be much of an improvement this time around.

Australia

Date Event Comments Monday 1/10/2018 House prices Sep: CoreLogic series, likely to be the 12th consecutive monthly fall Tuesday 2/10/2018 RBA rates decision Safest bet in spring. No change, a hold at 1.5pc Wednesday 3/10/2018 Building approvals Aug: May be a rebound after a 5pc fall in residential approvals in July Thursday 4/10/2018 Trade balance Aug: Another solid surplus above $1b forecast. Drought may be a drag Bank of Queensland FY result Cash profit of $190m forecast, well down on last year's $350m effort Friday 5/10/2018 Retail trade Aug: Hasn't been robust. Flat in July, perhaps only marginally stronger this time

Overseas